chapter 372 income tax management act · 2017. 12. 5. · income tax management [cap. 372.1 chapter...

INCOME TAX MANAGEMENT [CAP. 372. 1

CHAPTER 372

INCOME TAX MANAGEMENT ACTTo regulate the collection of income tax and to provide the administrative machinery for

such collection.

23rd September, 1994ACT XVIII of 1994 as amended by Acts XXIII and XXIV of 1995, XX of 1996, XVI of

1997, V of 1998, I and IX of 1999, VI and IX of 2001, II of 2002, II of 2003, II and XIIIof 2004, II of 2005, and II, IV and IX of 2007; Legal Notice 425 of 2007; Acts I of 2008,II of 2009 and I of 2010; Legal Notices 336 and 390 of 2010; and Acts IV of 2011, V of2012, III of 2013, XII, XXXVII of 2014, XIII and XXXIII of 2015, XV of 2016, and XVIof 2017.

ARRANGEMENT OF ACT

ArticlesPART I Preliminary 1-2PART II Administration 3-4PART III Persons assessable 5-9PART IV Returns 10-29PART V Assessments 30-33PART VI Appeals 34-39PART VII Collection 40-47PART VIII Refunds 48PART IX Offences and penalties 49-57PART X Power to make rules 58-60

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2 CAP. 372.] INCOME TAX MANAGEMENT

PART I

PreliminaryShort title. 1. The short title of this Act is Income Tax Management Act.Interpretation.

Cap. 123.

2. In this Act, and in any rules made under this Act, wordsand expressions shall, unless the subject in context otherwiserequires, have the same meaning and the same interpretation as themeanings and interpretations contained in article 2 of the IncomeTax Act.

PART II

AdministrationAppointment of administrative authority.Amended by:V. 1998.2;IX. 2001.30;II. 2004.47.Cap. 123.

3. (1) The administration of this Act and of the Income TaxAct, (hereinafter collectively referred to as "the Income Tax Acts")is vested in the Commissioner who may, in writing and subject tosuch limitations as he may think fit, delegate to any person any ofthe rights, duties, powers and other functions vested, conferred orimposed upon him by the Income Tax Acts.

(2) The Commissioner may appoint any person who in hisop in ion has the necessa ry qua l i f i ca t ions to ass i s t h im indetermining the value of any movable or immovable property forany of the purposes of the Income Tax Acts and such person shall,during the term of his appointment, be deemed to be an officeremployed in the administration of the Income Tax Acts and servingin the Commissioner’s department.

Official secrecy.Amended by: XXIV.1995.362;XVI. 1997.8;V. 1998.3;II. 2003.41;IV. 2007.24.L.N. 336 of 2010;XII. 2014.60;XIII. 2015.120.

4. (1) Except as may be necessary for the purposes of theIncome Tax Acts, or where the Prime Minister otherwise directs,every person having any official duty or being employed in theadministration of the Income Tax Acts shall regard and deal withall documents, information, returns and assessments relating to theIncome Tax Acts, or copies thereof, as secret and confidential andshall make and subscribe before the Court of Appeal a declarationon oath to that effect in the form prescribed.

(2) No person appointed under or employed in carrying out theprovisions of the Income Tax Acts shall be required to produce inany court, tribunal, Board or committee of enquiry, any return,document or assessment or to divulge or communicate to any court,tribunal, Board or committee of enquiry, any matter or thingcoming under his notice in the performance of his duties under theIncome Tax Acts except as may be necessary for the purpose ofcarrying into effect the provisions of the Income Tax Acts, or forthe purpose, or in the course, of a prosecution for any offencecommitted against any of the provisions of the Income Tax Acts.

(3) Nothing contained in this article shall prevent thed i sc losu re to any au thor i sed r ep resen ta t ive o f any o the rGovernment of such information as is required to be disclosed interms of -

Cap. 123. (a) any arrangement made under article 76 of the IncomeTax Act including the disclosure of such facts as may

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be necessary to enable proper relief to be given inMalta or elsewhere under any such arrangement orunder article 89 of the Income Tax Act;

(b) any other arrangement between Malta and other States ortheir tax authorities providing for the reciprocal exchangeof information for tax purposes.

(4) (Deleted by Act XIII. 2015.120).(5) (a) The Commissioner shall submit to the Speaker of the

House of Representa t ives a cer t i f ied s ta tementshowing the detai ls of income declared by eachMember of the House for the purpose of the IncomeTax Acts from the year of assessment in which suchMember first became a Member of the House and forevery subsequent year of assessment up to andincluding the year of assessment following the year inwhich such Member ceases to be a Member of theHouse: Provided that if a Member having ceased to be aMember of the House as aforesaid again becomes aMember of the House, the Commissioner shall alsosubmit to the Speaker the details of the income inrespect of the period covering the years when suchmember ceased to be a Member until he again becomesa Member of the House.

Cap. 248.

(b) The Speaker of the House of Representatives shall,upon a request in writing by any Member of the Houseor by the editor responsible for any newspaperregistered under the Press Act, furnish such Memberor editor with the details of income in respect of anyyear of assessment declared by any Member of theHouse for the purposes of the Income Tax Acts,provided that the details of income so requested havebeen made available to the Speaker under theprovisions of paragraph (a) and that prior to givingsuch information the Speaker shall notify suchMember whose details of income are being requested,with a copy of such request and of the reply beinggiven.

(6) Notwithstanding anything contained in this article, theCommissioner may permit the Auditor General of the Governmentor any other officer duly authorised in that behalf by the AuditorGeneral to have such access to any records or documents as may benecessary for the performance of his official duties. The AuditorGeneral or any such officer shall be deemed to be a personemployed in the administration of this Act for the purpose of thisarticle.

Cap. 364.

(7) Notwithstanding anything contained in this article, theCommissioner may make use of the documents, information andreturns relating to the income or items of income of any person forthe purpose of the Duty on Documents and Transfers Act, and mayproduce or cause to be produced in court in any proceedings





relating to duties levied or leviable, and for the collection of anypenalty infl icted under such Act, a copy of any part icularscontained in any document of return as aforesaid, certified by himor by the chairman of the Administrat ive Review Tribunalconstituted under article 34 or by the Registrar of Courts, as thecase may be, to be a correct copy of such particulars:

Provided that the Commissioner may produce or cause to beproduced the original of any such document or return in any casewhere it is necessary to prove the handwriting or the signature orthe identity of the person who wrote, made, signed or furnishedsuch document or return, but only for the purpose of such proof.

(8) Nothing in this article shall prevent the delivery ofdocuments by the Commissioner in accordance with article 57.

(9) Notwithstanding the provisions of the other sub-articles ofthis article or of any other law, the Commissioner shall furnish tothe head of the Value Added Tax Department such information,being information obtained by the Commissioner for any of thepurposes of this Act, as may be directed by the Minister.

PART III

Persons AssessableChargeability of agent or person residing out of Malta.Amended by:XIII. 2004.86;IV. 2011.55.Cap. 123.

5. (1) Further to the provisions contained in Part IX of theIncome Tax Act, a person not resident in Malta (hereinafter in thisAct referred to as "a non-resident person") shall be assessable andchargeable in the name of his trustee, guardian, tutor, curator orcommittee, or of any attorney, factor, agent, receiver, branch ormanager, whether such attorney, factor, agent, receiver, branch ormanager has the receipt of the income or not, in like manner and tothe like amount as such non-resident person would be assessed andcharged to tax in Malta as if he were in the actual receipt of suchincome.

A non-resident person shall be assessable and chargeable inrespect of any income arising, whether directly or indirectly,through or from any attorneyship, factorship, agency, receivership,branch or management, and shall be so assessable and chargeable inthe name of the attorney, factor, agent, receiver, branch or manager.

(2) Where the registered holder of a share holds such share forthe benefit of another person, the Commissioner shall be entitled totreat such registered holder as beneficially entitled to such shareexcept as provided in subarticle (3).

Cap. 330.

Cap. 331.Cap. 345.Cap. 370.

(3) Where the registered holder of a share had been licensedunder article 51A of the Malta Financial Services Authority Actand until such time that he is so licensed or is authorised orotherwise permitted to act as a trustee under article 43 or 43A ofthe Trusts and Trustees Act, a central securities depository authorisedunder article 24 of the Financial Markets Act or is licensed under theInvestment Services Act, to carry out activities within paragraph 4of the First Schedule to that Act and provides the Commissionerwith a certificate in writing that he holds the share for the benefit ofa person or persons all of whom are not resident in Malta within the






meaning of the Income Tax Acts, the Commissioner shall not treatthe registered holder of the share as beneficially entitled to it.

(4) A person referred to in subarticle (3) who issues a falsecertificate to the Commissioner shall be guilty of making a falsestatement within the meaning of article 52(1)(b).

Cap. 123.(5) The master of any ship owned or chartered by a non-

resident person who is chargeable under article 28 of the IncomeTax Act shall (though not to the exclusion of any other agent) bedeemed the agent of such non-resident person for all the purposesof the Income Tax Acts.

(6) Where a non-resident person carried on business with aresident person, and it appears to the Commissioner that, owing tothe close connection between the resident person and the non-resident person and to the substantial control exercised by the non-resident person over the resident person, the course of businessbetween those persons can be so arranged and is so arranged thatthe business done by the resident person in pursuance of hisconnection with the non-resident person produces to the residentperson either no profits or less than the ordinary profits whichmight be expected to arise from the business, the non-residentperson shall be assessable and chargeable to tax in the name of theresident person as if the resident person were an agent of the non-resident person.

(7) Where it appears to the Commissioner that the true amountof the gains or profits of any non-resident person chargeable to taxin the name of a resident person cannot in any individual case bereadily ascertained, the Commissioner may, if he thinks fit, assessand charge the non-resident person on a fair and reasonablepercentage of the turnover of the business done by the non-residentperson through or with the resident person in whose name he ischargeable as aforesaid and in such case the provisions of theIncome Tax Acts as to the delivery of returns or particulars bypersons acting on behalf of others shall extend so as to requirereturns or particulars to be furnished by the resident person of thebusiness so done by the non-resident person through or with theresident person, in the same manner as returns or particulars are tobe delivered by persons acting for incapacitated or non-residentpersons in respect of income to be charged:

Provided that the amount of the percentage shall in eachcase be determined having regard to the nature of the business andshall, when determined by the Commissioner, be subject to anappeal as provided by articles 35 and 37.

(8) Nothing in this article shall render a non-resident personchargeable in the name of a broker or general commission agent orother agent where such broker, general commission agent or agentis not an authorised person carrying on the regular agency of thenon-resident person, or a person chargeable as if he were an agentin pursuance of subarticles (5), (6) and (7), in respect of gains orprofits arising from sales or transactions carried out through such abroker or agent.

(9) The fact that a non-resident person executes sales or carries




out transactions with other non-residents in circumstances whichwould make him chargeable in pursuance of subarticles (5) and (6)in the name of a resident person shall not of itself make himchargeable in respect of gains or profits arising from those sales ortransactions.

(10) Where a non-resident person is chargeable to tax in thename of any attorney, factor, agent, receiver, branch or manager inrespect of any gains or profits arising from the sale of goods orproduce manufactured or produced out of Malta by the non-residentperson, the person in whose name the non-resident person is sochargeable may, if he thinks fit, apply to the Commissioner to havethe assessment to tax in respect of those gains or profits made oramended on the basis of the profits which might reasonably beexpected to have been earned by a merchant or, where the goods areretailed by or on behalf of the manufacturer or producer, by aretailer of the goods sold, who had bought from the manufacturer orproducer direct, and, on the proof to the satisfaction of theCommissioner of the amount of the profits on the basis aforesaid,the assessment shall be made or amended accordingly.

Cap. 370.

(11) A non-resident person shall not, by virtue of this article, beassessable or chargeable to tax in the name of an agent or otherrepresentative in respect of gains or profits arising to the non-resident person resulting from the provision in Malta by the agentor such other representative of any of the services listed in the FirstSchedule to the Investment Services Act, provided that:

(a) the investment services concerned are carried out inthe ordinary course of such business; and

(b) the remuneration which the agent or otherrepresentative receives for the provision of investmentservices to the non-resident person is at a rate which isnot less than that which is customary for that class ofbusiness, and in the case of an agent or otherrepresentative who provides investment services aspart only of a business, the provisions of paragraphs(a) and (b) shall apply as if that part were a separatebusiness.

(12) For the purposes of subarticle (11) an agent or otherrepresentative shall be deemed to have carried out an investmentservice on behalf of his principal whether he undertakes thetransaction himself or gives instructions to another person.

(13) The activities of the agent or other representative shall notaffect the residence of the non-resident person for tax purposes.

Acts to be done by trustees, etc.

6. The person in whose name a non-resident person ischargeable, shall be answerable for all matters required to be doneby virtue of the Income Tax Acts for the assessment of the incomeof any person for whom he acts and for paying the tax chargeablethereon.



Manager of corporate bodies of persons.Amended by:V. 2012.44.

7. (1) The manager or other principal officer of every body ofpersons shall be answerable for doing all such acts, matters andthings as are required to be done by virtue of the Income Tax Actsfor the assessment of such body and payment of the tax.

(2) Every such principal officer shall pay the tax out of theproperty of the body of persons. He shall, however, be liable forpayment personally, and jointly and severally with any other personresponsible therefor, if at any time after 1st January, 1979 he had inhis possession or control any property belonging to the body ofpersons which could have been used to pay the tax then due.

(3) The liquidator of a company which is being wound up shallnot distribute any of the assets of the company to its shareholdersunless he had made provision, in so far as he is able to do so out ofthe assets of the company, for the payment in full of any tax whichhe knows of or might reasonably expect to be payable by thecompany under the Income Tax Acts and in default, such liquidatorshall be liable personally, and jointly and severally with any otherperson responsible therefor, for payment of the tax due:

Cap. 386.

Provided that this sub-article shall not apply to an officialreceiver, or any other person, appointed in accordance with theprovisions of article 225 of the Companies Act.

Lists to be prepared by representative or agent.

8. Every person who in whatever capacity is in receipt of anymoney or value being income arising from any of the sourcesmentioned in the Income Tax Acts or belonging to any person whois chargeable in respect thereof, or who would be so chargeable ifhe were resident in Malta and not an incapacitated person, shallwhenever required to do so by any notice from the Commissioner,prepare and deliver within the period mentioned in such notice alist signed by him containing -

(a) a true and correct statement of such income; and(b) the name and address of every person to whom the

same shall belong,and the provisions of the Income Tax Acts with respect to thefailure to deliver lists or particulars in accordance with a noticefrom the Commissioner shall apply to any such lists.

Indemnification of representative.

9. Every person answerable under the Income Tax Acts forthe payment of tax on behalf of another person may retain out ofany money coming to his hands on behalf of such other person somuch thereof as shall be sufficient to pay such tax, and shall be andis hereby indemnified against any person whatsoever for allpayments made by him in pursuance and in virtue of the IncomeTax Acts.

PART IV

ReturnsReturn of income.Substituted by:IX. 1999.2.Amended by:IV. 2011.56.

10. (1) The Commissioner may, by notice in writing, requireany person to furnish him by not later than such date as may beprescribed with a return of income together with and containing



such particulars, statements, accounts, computations or otherdocuments as may be necessary to enable such person’s income andallowable deductions and the tax payable by or repayable to thatperson to be readily ascertained in accordance with and for thepurposes of the Income Tax Acts.

(2) The Commissioner may, by means of the notice referred toin subarticle (1), require any person to include in his return ofincome for the year of assessment 1999 and any subsequent year ofassessment a self-assessment, that is to say, a computationshowing:

(a) the chargeable income of that person for the year ofassessment on the basis of the information containedin the return of income;

(b) the tax chargeable thereon; and(c) the tax payable by or repayable to that person for the

year of assessment, being the difference between thetax computed under paragraph (b) and the aggregate ofthe amounts referred to in the following sub-paragraphs, disregarding any credit, relief or tax paid,withheld, payable or repayable for any other year ofassessment:

(i) any provisional tax paid and any tax deducted atsource that falls to be set off or that is availableas a credit in accordance with the provisions ofthe Income Tax Acts against the tax computedunder paragraph (b);

Cap. 123.

(ii) any tax credit or relief claimed and due inaccordance with the provisions of Part X of theIncome Tax Act relating to the chargeableincome computed under paragraph (a); and

(iii) any other amount paid on account of the taxchargeable for the year of assessment ascomputed under paragraph (b).

(3) A self-assessment shall not be construed as being anassessment for any purpose of the Income Tax Acts and anyreference in the said Acts to an assessment shall not be construed asor as including a reference to a self-assessment.

(4) If a person required to file a return of income under thisarticle is a company registered in Malta it shall furnish togetherwith the return the documents specified in article 19(4).

(5) No return purporting to have been filed in accordance withthe provisions of this article shall be considered to have been sofiled unless it is complete in all material respects, including a self-assessment when required by the notice referred to in subarticle (1),and unless it is accompanied by such documents as are requiredunder the other provisions of this article.



Commissioner may request information.Added by:II. 2003.42.Amended by:II. 2005.31.Substituted by:I. 2008.2.Amended by:XXXIII. 2015.108.

10A. (1) The Commissioner may, when and as often as hedeems necessary, give notice in writing to any person to furnishhim, within a reasonable time stated in such notice, not being lessthan thirty days, such information as may be necessary in order toprovide informat ion , inc luding documents , to fore ign taxauthorities where arrangements between Malta and the respectiveState or its tax authorities exist for the reciprocal exchange ofinformation for tax purposes.

(2) The provisions of this article shall apply even if theCommissioner could not collect the relevant information for thepurposes of the Income Tax Acts. The provisions of this articleshall have effect in respect of any person, entity or scheme,including a person entity or scheme referred to in article 17,notwithstanding any obligation to secrecy or confidentiality, or toany other restriction relating to the disclosure of information.

(3) For the purposes of this article, "tax" means any tax towhich an arrangement as referred to in subarticle (1) applies.

(4) The powers of the Commissioner to require a person toprovide information under this article include the power:

(a) to require any person to complete and deliver to theCommissioner any return specified in that notice;

(b) to summon any person who, he has reason to believe,is able to give information required for the purposes ofthis article, to attend before him and to examine suchperson on oath or otherwise;

(c) to require any person to produce for examination anybooks, documents, accounts (including bankstatements, passbooks and other bank documents) andany other document which the Commissioner mayrequire or a copy or extract thereof;

(d) to require any person to give information by means ofwritten statements;

(e) to require any person to authenticate in such form asthe Commissioner may consider appropriate or as maybe prescribed any document prepared by that person oran extract thereof or the copy of any document held bythat person or of an extract thereof;

(f) to require any person to confirm on oath anydeclaration made by him or any document prepared byhim;

(g) to require any person to provide information,documents or written statements in such other form asthe Minister may prescribe.

Rules for the collection and maintenance of information.

(5) The Minister may make rules for the collection andmaintenance of information, even where arrangements betweenMalta and other relevant jurisdictions, or their tax authorities, forthe purposes of exchange of information for tax purposes, are not inforce:

Provided that the person that is obliged to collect and


maintain such information according to such rules shall not beobliged to provide such information to the Commissioner before anarrangement between Malta and the other relevant jurisdiction, orits tax authorities, for the purposes of exchange of information fortax purposes, enters into force.

Where notice is not received.Substituted by:IX. 1999.2.

11. Where any person chargeable with tax has not received thenot ice ment ioned in ar t ic le 10(1) in respect of any year ofassessment for which he is so chargeable by such date as may beprescribed for the purpose of this article, the provisions of the saidarticle 10 shall apply to him as if he has been duly served with anotice under subarticle (1) of that article and, with respect of theyear of assessment 1999 and any subsequent year of assessment,with a notice under subarticle (2) of that article, and it shallaccordingly be the duty of that person to furnish a return of incomeunder that article including, when applicable, a self assessment forthat year and to comply with all the other provisions of the saidarticle.

Election not to furnish return. Substituted by:IX.1999.2.

12. (1) Notwithstanding the provisions of articles 10 and 11,but without prejudice to the other provisions of this Part, a personto whom this article applies shall not be required to furnish a returnof income for a year of assessment if he makes an election for thatyear under and in accordance with this article.

(2) This article applies to:(a) an individual resident in Malta whose total income for

the year of assessment -

Cap. 123.(i) does not include any income falling under article

4(1)(a) of the Income Tax Act; and

Cap. 123.

(ii) does not exceed the amount to which a nil rate oftax applies in terms of the relevant provisions ofarticle 56(1) of the Income Tax Act;

(b) an individual resident in Malta whose total income forthe year of assessment consists solely of income thatwas subject to deduction at source, including incomesubject to a nil rate of deduction, in terms ofregulations made for the purposes of article 23 andfully reported in a statement or statements of earningsprepared in accordance with the said regulations andheld in his possession;

(c) a person who is designated as a person to whom thisarticle applies by regulations that may be prescribedunder this article.

Cap. 123.(3) (a) When a person has an option in terms of any provision

of the Income Tax Act to disclose or not discloseincome, that income shall not be taken into account forthe purposes of subarticle (2), and if that person makesan election under this article he shall be deemed for thepurposes of the Income Tax Acts to have opted not tod i s c l o s e t h a t i n c o m e a n d s u c h i n c o m e s h a l laccordingly not form part of his total income.





(b) When a person makes an election under this article, theincome that he would have been required to disclosewere it not for the provisions of this article shall betaken into account in determining his total income forany purpose of the Income Tax Acts.

Cap. 123.

(c) When a person makes an election under this article andhe is also eligible to make an election for a separatecomputation under article 50 of the Income Tax Act,that person shall be deemed to have taken the moreadvantageous option under that article according to hisparticular circumstances.

(d) With respect to a married individual living with his orher spouse references in this article to an individualshall be construed as references to the responsiblespouse and references to the income or the chargeableincome o f an ind iv idua l sha l l be cons t rued a sreferences to the income or the chargeable income ofboth spouses.

(4) (a) An election under this article shall be made by thedelivery to the Commissioner of a signed declarationconfirming the person’s eligibility to make the electionin terms of this article and complying with the otherprovisions of this subarticle.

(b) An election shall not be deemed to have been madeunder this article unless:

(i) it is made by a person to whom this articleapplies;

(ii) it is made on the prescribed form and containssuch particulars and is accompanied by suchdocuments as may be required by that form; and

(iii) it is delivered to the Commissioner by not laterthan such date as may be prescribed.

No obligation to furnish return of income.Added by:IV. 2007.25.

12A. (1) Notwithstanding the provisions of articles 10, 11 and12, but without prejudice to the other provisions of this Part, aperson shal l not be required to furnish a re turn of incomementioned in article 10(1) or to make an election in terms of article12 where the Commissioner gives notice in writing to this effect tosuch person.

(2) The notice mentioned in subarticle (1) shall include aperson’s income which is required to be disclosed for the purposesof the Income Tax Acts as known to the Commissioner at the timeof service of the said notice.

(3) When a person who is served with a notice mentioned insubarticle (1) has income required to be disclosed that is higherthan that shown in the said notice it shall be the duty of that personto furnish a return of income under article 10(1).

(4) Where the notice mentioned in subarticle (1) results in arefund of tax, the Commissioner shall refund such tax after theperson in receipt of such notice has agreed in writing that the



refund is due to him, and if it then results that the refund is whollyor partly not due to the said person and that the said person hasfailed to abide by the provisions of subarticle (3) the provisions ofarticle 48(9) shall apply.

Further returns.Substituted by:IX. 1999.2.Amended by:II. 2009.29.

13. (1) The Commissioner may when and as often as he thinksnecessary give notice in writing to any person who has filed areturn under article 10 requiring him to furnish, within a reasonabletime stated in such notice, not being less than thirty days, fuller orfurther returns respecting any matter as to which a return isrequired by the said article.

(2) The Commissioner may give notice in writing to any personwho has made an election under article 12 to make a return ofincome and to make a self assessment under article 10 and tocomply with the other provisions of that article within a reasonabletime stated in such notice and not being less than thirty days.

(3) A person who has delivered a return of income may at anytime before an assessment is made under article 31 make suchcorrections to or additions to that return as he may considerappropriate by furnishing a further return in such manner and onsuch form as may be prescribed.

(4) When a further return made pursuant to subarticle (3) withrespect to a year of assessment produces a reduction in the taxpayable by or an increase in the tax repayable to that person asresulting from a previous return, it shall not have any effect for thepurposes of this Act if it is made later than five years from theexpiration of that year of assessment.

(5) A person who has made an election under article 12 withrespect to a year of assessment may at any time within that year ofassessment or within five years from the expiration thereof, butbefore an assessment is made under ar t icle 31, furnish theCommissioner with a return of income including a self-assessmenton such form as may be prescribed.

(6) When a return for a year of assessment is furnishedpursuant to and in accordance with this article it shall be deemed tobe a return of income made under article 10 and shall be read andconstrued as one with any other return that may have been so madefor that same year, and any determination made under article 31shall be revised and replaced as necessary, provided that:

(a) such return shall not relieve any person of any penalty,tax, additional tax or interest to which he may havebecome liable in accordance with any provision of theIncome Tax Acts;

(b) a person who has made an election under article 12 andwho submits a return in accordance with subarticle (2)or subarticle (5) shall not be deemed to have made adefault by reason only of the fact that the return issubmitted after the time prescribed for the purposes ofarticle 10(1).

(7) The Commissioner may give notice in writing to any person


informing him that an enquiry will be conducted into that person's taxdeclarations and liabilities in respect of such years of assessment asshall be indicated in the said notice.

Power to call for returns, books, etc.Amended by:II. 2003.43;|IV. 2011.57.Cap. 123.

14. (1) For the purpose of obtaining full information in respectof any person’s income, the Commissioner may, notwithstandingany other provision of this Act or of the Income Tax Act, givenotice to such person requiring him within a reasonable time tocomplete and deliver to the Commissioner any return specified insuch notice and/or to attend personally or by representative beforehim and to produce for examination any books, documents,accounts and returns (including bank statements and passbooks)which the Commissioner may deem necessary.

(2) Notwithstanding any provision of the Income Tax Acts orany other law the Commissioner may, for the purpose of obtainingfull information in respect of any person’s income, give notice inwriting to such person requiring him to furnish the Commissionerwithin the time indicated in such notice, not being less than thirtydays from the date of service of such notice, a statement containingparticulars of -

(a) all property held in his own name or in the name of hisspouse, minor children or dependents, or in any othername, in which he is or has been interested or has orhas had a beneficial interest, or in respect of which hehas or has had the power to operate or dispose, jointlyor solely, in his own economic interest and whichproperty is in existence or which has existed at anytime during the period stated in the notice;

(b) all income derived from the property referred to inparagraph (a);

(c) all other property wherever situated not referred to inparagraph (a) and the income derived therefrom;

(d) any property transferred or delivered by him to, orwhich is currently held by, any person, including adesignated person referred to in subarticle (3), duringthe period or periods specified in such notice; and

(e) all facts bearing upon his liability to income tax whichhe is, or has been, liable to.

(3) (a) Where, subsequent to a request for information madein accordance with the provisions of subarticles (1)and (2), the Commissioner has reasonable grounds tosuspect that tax has been, is, or may be evaded by anyperson, he may request, by notice in writing to adesignated person, that the designated person providethe Commissioner, within the time indicated in suchnotice not being less than thirty days from the date ofservice of such notice, with all such information anddocumentation which the designated person may haverela t ing to proper ty of any kind or descr ipt ion,transferred or delivered to him by that person andowned, possessed, or held by the designated person



under any title on behalf of or for the benefit of anysuch person on the date of the said notice or during theperiod specified in such notice not commencing earlierthan five years from the date of such notice; providedthat the designated person shall not be bound toprovide information to the Commissioner in respect ofany beneficiaries for whose benefit the property maybe held or the terms and conditions under which it is soheld.

Cap. 377.

(b) Any designated person who receives such notice shallprovide the Commissioner with the informationrequested in the notice and this notwithstandinganything to the contrary in the Income Tax Acts, anyprovision of the Professional Secrecy Act, anyobligation of secrecy or confidentiality, or to any otherrestriction relating to the disclosure of informationwhether arising from a provision of law or anyagreement or other arrangement.The Commissioner shall keep confidential anyinformation provided to him by the designated personand shall not disclose such information to any otherperson except where the Commissioner is bound at lawto effect such disclosure or where he requires to usesuch information in the context of proceedings underthis Act; provided that the Commissioner may reportany act or failure by the designated person to therelevant regulatory authority which issued a licence orauthorization to such designated person.Any information obtained by the Commissioner shallbe used by him solely for the purpose of theinvestigation being carried out by the Commissioner asto whether tax has been, is, or may be evaded by therelevant person being investigated and, or any relatedproceedings under this Act.

(c) The Commissioner shall specify in a notice issuedunder this article what information he requires andwhether with reference to the property held on the dateof the notice and, or at any point during a period oftime (not commencing earlier than five years from thedate of such notice), and the designated personreceiving the notice shall supply the followinginformation:

(i) details of any such property owned, possessed orotherwise held under any title and which hadbeen transferred or delivered (whether directlyor indirectly through a transaction or a numberof transactions which the designated person isaware of) to the designated person or vested insuch designated person by or on the instructionsof the person in respect of whom notice has beengiven by the Commissioner to the designatedperson in terms of paragraph (a); and


(ii) details of the person or persons who transferredor delivered or made arrangements for thedesignated person to receive the property or onwhose behalf the property was so transferreddelivered or vested in the designated persons:

Provided that this paragraph (c) shall also apply to anyproperty transferred or delivered to the designatedperson and is no longer held by the designated personor has been converted into a different form of propertyor has increased or decreased in value or extent or hasbeen transferred to another designated person, butshall not apply where the property has been heldtemporarily for the purpose of a transaction and hasbeen returned to the person who is being investigated.

(d) If the designated person in receipt of a notice -(i) has not held any property which was transferred

or delivered (whether directly or indirectlythrough a transaction or a number oftransactions which the designated person isaware of) to the designated person or vested insuch designated person by the person in respectof whom notice has been given by theCommissioner to the designated person in termsof paragraph (a); or

(ii) holds or has held the aforesaid property on atemporary basis or as a simple administrator; or

(iii) has returned the aforesaid property to the personin respect of whom notice has been given by theCommissioner to the designated person in termsof paragraph (a),

he shall inform the Commissioner accordingly andshall have no further obligations in this regard unlessthe Commissioner seeks further informationspecifically on such circumstances in which case theprovisions of this article shall apply mutatis mutandis.

(e) Where a notice has been given by the Commissioner toa designated person in terms of paragraph (a), theCommissioner shall, within fifteen days of issue ofsuch notice, inform by a further notice in writing theperson in respect of whom such notice was given, thathe has issued a notice under this article, and anydesignated person in receipt of any such notice mayinform his customer, principal or other person whomay have delivered, settled, donated or otherwisetransferred property to the designated person of thereceipt of such notice and his response thereto.Such further notice in writing may be served on aperson either personally or by being sent by post to hislast known business or private address, and shall in thelatter case be deemed to have been served within threeworking days from the date it is sent by post.


(f) For the purposes of this article:(i) "property" means property of any kind or

description, whether movable or immovable,personal or real, and wherever situated, and inrelation to rights and interests whether vested,contingent, voidable or future, and including anymoney, investments, and amounts in savings,loan and other bank accounts (whether fixed,overdraft, current, deposit, or otherwise, andwhether business or private accounts);

(ii) a designated person is any person who may beacting as mandatory, nominee, trustee, agent,depository, custodian, under a contract of workor otherwise, and includes without limitationany of the following:

Cap. 371.(A) a person who is in possession of a valid

licence issued in terms of the Banking Act;or

Cap. 370.(B) a person who is licensed in terms of the

Investment Services Act; or

Cap. 403.

Cap. 487.

(C) a person who is authorized in terms of theInsurance Business Act or enrolled in theBrokers List under the InsuranceIntermediaries Act; or

Cap. 331.(D) a person who is authorised under the

Trusts and Trustees Act to act as a trusteeor as an administrator of any privatefoundation; or

(E) advocates, notaries, legal procurators,accountants, auditors and other personsholding warrants to exercise a profession,

and irrespective of whether such person is inactual possession of authorisations or is exemptfrom requiring such authorisations under anylaw or is acting in breach of law when holdingsuch property without authorisation required todo so by applicable law;

(iii) owning, possessing and holding propertyincludes owning, possessing and holding withothers or through others and, or enjoying apower to operate or dispose of such property insuch manner as renders secret the ownershiprights or interests of the person beinginvestigated and does not include circumstanceswhere such person remains registered as theowner of the property in a public register inMalta or where the designated person is owning,holding or possessing the property temporarilyfor the purposes of a transaction relating to orinvolving such property or is otherwise a simpleadministrator of such property;


(iv) reasonable grounds on the part of theCommissioner to suspect that tax has been, is ormay be evaded by any person shall include butnot be limited to the following:(A) a refusal by that person to provide the

Commissioner with any documentation orinformation as may have been requestedfrom him by the Commissioner in relationto any property which he owns, possesses,or holds at that time through anotherperson including designated persons, orany property previously owned, possessedor held and subsequently disposed ofunder any title whatsoever by such personat an earlier date;

(B) where a notice in terms of article 29 is notmade as the taxpayer could not be found orfor other reasons attributable to thetaxpayer, and in accordance with the saidarticle 29, the Commissioner publishes anotice in the Gazette and in one or moredaily newspapers stating that a notice hasbeen made and inviting the taxpayer to callfor it at the Department;

(C) where, after being requested by theCommissioner by means of a notice inwriting, such person fails to producewithout any reasonable excuse any books,records, documents, accounts, electronicdata and a correct statement referred to insubarticle (2) within thirty days from thedate of service of such notice;

(D) such person gives any false answer,whether verbally or in writing, to anyquestion or request for information askedor made in accordance with the provisionsof the Income Tax Acts;

(E) such person prepares or maintains anyfalse books of account or other records orfalsifies any books of account or records.

(g) Where a designated person gives any false, misleadingor incorrect information in relation to a notice issuedunder this subarticle he shall be guilty of an offenceand shall, on conviction, be liable to a fine (multa) ofnot less than ten thousand euro (€10,000) and notexceeding twenty-three thousand euro (€23,000).

Returns to be deemed to be furnished by due authority.

15. A return, statement or form purporting to be furnishedunder the Income Tax Acts by or on behalf of any person shall forall purposes be deemed to have been furnished by that person or byhis authority, as the case may be, unless the contrary is proved, andany person signing any such return, statement or form shall be


deemed to be cognizant of all matters therein.Official information.Amended by:II. 2005.32;I. 2008.3.

16. The Commissioner may require any person having anoffice or employment, whether paid or otherwise, with theGovernment of Malta or with any organisation or other bodywhether having a legal personality or not in which the Governmentof Malta or any such body as aforesaid have a controlling interestor over which they have effective control to supply such particularsin respect of any matter as may be required for the purposes of theIncome Tax Acts and which may be in the possession of suchperson having such office or employment:

Provided that, subject to article 10A, no such person havingsuch office or employment as aforesaid shall, by virtue of thisarticle, be obliged to disclose any information in relation to aperson in respect of which such person having such office oremployment is under the duty of professional secrecy. Where anyinformation is protected by professional secrecy for the benefit ofany person, nothing in this proviso shall preclude the giving of suchinformation in respect of any other person, excluding therefrom thename of the person in whose interest such protection is given

Professional secrecy.Amended by:I. 2008.4;IV. 2011.58.

17. Without prejudice to the provisions relating to the duty ofprofessional secrecy, and subject to articles 10A and 14(3), no requestfor information shall be made pursuant to any power under theIncome Tax Acts from any of the following licensed persons:

Cap. 371. (a) a bank licensed under the Banking Act;

Cap. 290 - Repealed.

(b) an insurance company in respect of life assurancebusiness which is carried on pursuant to a licencegranted under the Insurance Business Act;

Cap. 370.

Cap. 370.

Cap. 345.

(c) any person licensed to carry on investment businessunder the Investment Services Act;

(d) a collective investment scheme licensed under theInvestment Services Act;

(e) a stockbroker licensed under the Malta StockExchange Act,

except solely for the purposes of determining the taxable income ofsuch licensed person, and in replying to any such request thelicensed person shall not disclose any information in relation to theaffairs of persons with whom the licensed person has or has had aprofessional relationship:

Cap. 123.

Provided that nothing in this article shall prejudice the rightof the Commissioner to make a request referred to in article 34(2)of the Income Tax Act.

Substitution of original returns.Amended by:IX. 1999.3.

18. (1) Where any return, statement or form completed anddelivered to the Commissioner for the purposes of the Income TaxActs has been lost or destroyed, or has been so defaced or damagedas to be illegible or otherwise useless, the Commissioner mayrequire the person by or on whose behalf such return, statement orform has been completed and delivered to furnish him to the best ofhis ability with a duplicate copy of such return, statement or form








or to give such information, particulars or evidence as may berequired in replacement.

(2) Nothing in this article contained shall affect the provisionsof article 30(4) and (5) or article 31(5) and (6), nor shall theCommissioner be empowered to require a copy of any return,statement or form, or the provision of any information, particularsor evidence in respect of any year of assessment where the raisingof the relat ive assessment is s tatute-barred in terms of theprovisions of the said subarticles.

Records to be kept. Amended by: XX.1996.21;II. 2007.23;IV. 2007.26.

19. (1) Every person carrying on a trade, business, professionor vocation shall keep proper and sufficient records of his incomeand expenditure to enable his income and allowable deductions tobe readily ascertained.

(2) The records referred to in subarticle (1) shall include:(a) proper accounts with respect to -

(i) all sums of money received or expended and thematters in respect of which the receipt orexpenditure takes place; and

(ii) all sales, purchases or services rendered, as wellas any other transaction, act or operationpertaining to the trade, business, profession orvocation;

(b) a profit and loss account or equivalent annualstatement;

(c) a statement of the assets and liabilities as on the dateon which the annual accounts of the trade, business,profession or vocation are made up or, in the case of acompany, a balance sheet.

(3) Subject to such conditions as he may deem fit to impose,the Commissioner may exempt any person in respect of any year ofassessment from keeping any record or statement referred to insubarticle (2).

(4) The records required to be kept under the provisions of thisarticle shall be supported by such documents as may be appropriatein the circumstances, including -

Cap. 386.

(a) in the case of a company registered in Malta, thebalance sheet and profit and loss account, which shallcomply in every respect with the applicable provisionsof articles 167, 168 and 169 of the Companies Act andnotwithstanding any exemption made by that Act or byany other law, such balance sheet and profit and lossaccount shall be accompanied by a report made out bya certified public auditor as provided by the applicableprovisions of articles 179 and 181 of that Act:Provided that in the case of a company which is notresident in Malta, such records shall be those whichrefer to the company’s activities in Malta:Provided further that the auditor’s report mentioned in



this paragraph shall not be required for the first twoaccounting periods of a newly registered companywhose sole shareholders are graduates of a Post-Secondary Institution who have set up the newcompany within three years of graduating and subjectto such conditions, including the amount of turnover,as may be prescribed.'

(b) in the case of a co-operative society, the auditedfinancial statements of the society, prepared in allrespects as required by the law for the time being inforce regulating co-operative societies andaccompanied by any report which is by any such lawrequired to accompany the audited financial statementsof the society.

(5) All records required to be kept by any of the provisions ofthis article shall be retained for a period of not less than nine yearsafter the completion of the transactions, acts or operations to whichthey relate:

Cap. 386.

Provided that the provisions of this subarticle shall notapply where effect has been given to the provisions of article 26, ofarticle 163(5) or of article 324(2) of the Companies Act.

Certain powers of the Commissioner.Amended by:XI. 2001.31;II. 2005.33;L.N. 425 of 2007;IV. 2011.59.

20. (1) The Commissioner, or any officer authorised by him inwr i t ing sha l l have fu l l and f ree access to a l l bus iness o rprofessional premises such as offices, factories, workshops,warehouses, garages and land serving such purposes in order toinspect any books, documents, accounts, returns and electronic data orto observe and record the nature and importance of any business orprofessional activity carried on there, and to check the existence ofmerchandise and means of production and transport and shall havefull and free access to any property or other asset whose value isrequired to be determined for any of the purposes of the Income TaxActs to the extent that such access is likely to assist him in determiningthe said value:

Provided that the Commissioner or any officer authorisedby him as aforesaid may not seize any notarial act or register, andmay not inspect public wills, the acts of delivery of secret wills andregisters thereof during the life of the testator or testators, withoutthe permission in writing of such testator or testators:

Provided further that the Commissioner or any officerauthorised by him as aforesaid may not inspect any document orother record which is protected by the duty of professional secrecyor listen to any conversation or recording device which is protectedby the same duty.

(2) If, in the exercise of his powers under subarticle (1), theCommissioner or a person authorised by him as aforesaid, requiresaccess to premises occupied in whole or in part for the purposes ofhabitation, such access shall require the presence of an officer ofthe Police of a rank not below that of inspector and shall not takeplace between nine in the evening and five in the morning.



Cap. 55.

(3) The Commissioner shall, for the purpose of assessing thetax under the Income Tax Acts, be entitled to make the applicationreferred to in article 68(2)(a) of the Notarial Profession andNotarial Archives Act, and the provisions of the said subarticle (2)shall apply to such application in so far as applicable.

(4) If any person prevents or obstructs the Commissioner or thesaid officer in the execution of his duties, or refuses to comply withany request made by the Commissioner or by the said officer inaccordance with the provisions of this ar t icle, he shall , onconviction by the Court of Magistrates, sitting as a court ofcriminal judicature, be liable to a fine (multa) of not less than fifty-eight euro (58) and not exceeding four hundred and sixty-five euro(465) or to imprisonment for a term not exceeding six months or toboth such fine and imprisonment.

(5) The powers of investigation under this article shall not beexercised unless the Commissioner or any officer authorised byhim, has reasonable grounds to suspect that tax is being evaded inrespect of operations carried out by the taxpayer on the premisesreferred to in subarticle (1).

Return to be delivered by employer.

21. (1) Every employer when required to do so by notice fromthe Commissioner shall, within the time limited by the notice,prepare and deliver for any year a return containing -

(a) the names and places of residence of all personsemployed by him;

(b) the payments and allowances made to those persons inrespect of that employment,

and the provisions of the Income Tax Acts with respect to thefailure to deliver returns or particulars in accordance with a noticefrom the Commissioner shall apply to any such return.

(2) Where the employer is a body of persons, the manager orother principal officer shall be deemed to be the employer for thepurposes of this article, and any director of a company, or personengaged in the management of a company, shall be deemed to be aperson employed.

Payment of tax of individuals employed but not domiciled or ordinarily resident in Malta.

22. (1) In this article the expression "individual to whom thisarticle applies" means an individual who is not domiciled in Maltaor who, if so domiciled, is not ordinarily resident therein.

(2) Where any person employs in Malta an individual to whomthis article applies and who is or is likely to be chargeable with taxunder the provisions of the Income Tax Acts, he shall give notice inwriting to the Commissioner not later than three months after thedate of the commencement of such employment, stating the fullname and address of such individual, the date of commencementand the terms of employment.

(3) Any person ceasing to employ in Malta an individual towhom this article applies and who is or is likely to be chargeablewith tax under the Income Tax Acts, shall give notice in writing tothe Commissioner not less than one month before such individual




ceases to be employed by him in Malta stating the name andaddress of the individual and the expected date of cessation:

Provided that the Commissioner may accept such shorternotice as he may deem reasonable.

(4) Any person who employs in Malta an individual to whomthis article applies and who is to the knowledge of such personabout to leave or intending to leave Malta on termination of hisemployment with such person shall give notice in writing to theCommissioner of the expected date of departure of such individual.Such notice shall be given not less than one month before theexpected date of departure:

Provided that the Commissioner may accept such shorternotice as he may deem reasonable.

(5) Where any person in his capacity as employer of anindividual hereinafter mentioned has in his possession any monieswhich whatsoever are or may be payable to or for the benefit of anindividual to whom this article applies and who has ceased or isabout to cease to be employed by such person in Malta, he shall notwithout the permission of the Commissioner, notwithstanding theprovisions of any other law, pay any part of such monies to or forthe benefit of such individual until the expiry of thirty days afterthe receipt by the Commissioner of such notice as is required to begiven under subarticle (4).

(6) The Commissioner may by notice in writing whenever hethinks fit declare any person who employs in Malta an individual towhom this article applies, being an individual who is or is likely tobe chargeable with tax under the Income Tax Acts, to be therepresentative taxpayer of such individual, and the person sodeclared shall be the representative taxpayer of such individual forthe purposes of the Income Tax Acts and may be required to payany tax due by such individual from property or monies, includingpension, salary, wages or any remuneration which may be due byhim to such individual and, in default , such payment shall ,notwithstanding the provisions of any other law, be recoverablefrom the representative taxpayer so declared by the Commissionerin the manner provided in Part VII of this Act.

(7) Any notice to be given to the Commissioner in accordancewith the provisions of this article shall be given in addition to anyother notice to be given under article 23.

(8) Where services are rendered in Malta for any personresident in Malta by an individual who does not have an employerin Malta the foregoing provisions of this article shall apply to suchresident person in the same manner as if he were the employer ofthe said individual.


Payment by deduction at source from certain income.Amended by:V. 1998.5;IX. 1999.4;II. 2003.44;II. 2004.49;L.N. 425 of 2007;IV. 2011.60.Cap. 123.

23. (1) Where any person pays income chargeable underarticle 4(1)(a), (b) or (d) of the Income Tax Act, or any otherincome as may be prescribed, he shall, at the time of paymentdeduct tax therefrom at such amount and in such manner as may beprescribed under this subarticle or under any other provision of theIncome Tax Acts.

(2) Any tax deducted as required under subarticle (1) shall beremitted to the Commissioner in such manner and within suchperiod as may be prescribed.

(3) Deductions of tax made under subarticle (1) shall be set offfor the purposes of collection against the tax chargeable on thecorresponding income for the year of assessment following thatduring which the relative deductions are made, or for any otheryear of assessment as the Commissioner may elect and any taxwhich cannot be se t off as a foresa id sha l l be re funded inaccordance with the provisions of article 48:

Provided that such tax shall not be set off or refunded asaforesaid unless the person receiving the income has declared thatincome in a return of income furnished in accordance with article10 or made an election under article 12 for the year of assessmentfollowing that during which the deductions were made or hascomplied with such conditions that may be prescribed to the extentthat they are relevant to the income in question:

Provided further that the provisions of this subarticle shallnot apply where any tax deducted as aforesaid has not beenremitted to the Commissioner and the Commissioner is satisfiedthat such non-remittance was due to any fault or connivance on thepart of the person receiving the income.

(4) If any person fails to deduct tax in accordance with theprovisions of any rules referred to in subarticle (1) or afterdeducting such tax, fails to pay it to the Commissioner within theprescribed period or who otherwise fails to comply with theprovisions of such rules, he shall be liable to the prescribedadditional tax which the Commissioner is empowered to imposeunder subarticle (5) hereof and where applicable he shall, inaddition, be chargeable with the tax which should have beendeducted or paid.

(5) Where the Commissioner has reason to believe that aperson has made a default against the provisions of any rulesreferred to under this article he may at any time serve upon suchperson a default notice as prescribed showing the tax which shouldhave been deducted or remitted and/or any additional tax imposedupon him as aforesaid, sohowever that such additional tax shall notexceed the amount of one thousand euro (€1000) for every suchdefault; and the additional tax so imposed shall be borne by theperson to whom subarticle (4) applies and shall not be recoverableby such person wholly or in part from the person receiving theincome.

(6) If any person feels aggrieved by a default notice servedupon him under subart ic le (5) hereof , he may apply to theCommissioner in writing contesting such notice in the manner and



within such period as may be prescribed.(7) Where a person has not contested the default notice referred

to in subarticle (5) hereof or where his contestation has beenrefused, the Commissioner may, where the payment of the amountdue has not already been made, serve a demand notice on suchperson showing the tax which should have been deducted orremitted and/or any additional tax imposed upon him; and, unlessthe contrary is proved, the said notice shall be sufficient evidencethat the amount shown therein is the amount due to be paid to theCommissioner by the said person:

Provided that a person on whom a demand notice has beenserved in consequence of a refusal by the Commissioner inaccordance with this subarticle may appeal such decision in a courtof law within fifteen days from the date of service of such notice.

(8) The Commissioner may in his discretion remit wholly or inpart any additional tax imposed under the provisions of this article.

Cap. 123.

(9) Any additional tax imposed under the provisions of thisarticle shall not be deemed to be part of any tax paid or payable forthe purposes of any other article of this Act or of any article of theIncome Tax Act or any rules made thereunder.

(10) The powers conferred upon the Commissioner by thisarticle shall be in addition to any right conferred upon him tocommence proceedings in respect of an offence under theprovisions of subarticle (13).

Cap. 318.

(11) Notwithstanding the provisions of any other law, thedemand notice by the Commissioner referred to in subarticle (7),showing the amount due to be paid under this art icle, shallconstitute a privileged claim over the assets of the employerranking immediately after the wages of employees and claims ofthe Director of Social Security for any amounts due by way ofcontribution under article 116 of the Social Security Act, and shallbe paid after such wages and claims in preference to all otherclaims whether privileged or hypothecary.

Cap. 123.

(12) Any person to whom this article applies shall at all timesmaintain proper and sufficient records as may be prescribed andshall, whenever called upon to do so by the Commissioner or byany public officer authorised by him in writing, produce forinspection at such person’s premises or as otherwise directed, allwage sheets, lists and documents and other records whatsoeverrelating to any payment made by him of income chargeable underparagraph (b) or (d) of subarticle (1) of article 4 of the Income TaxAct, to any other income as may be prescribed, to any tax deductionmade therefrom or to the accounting of any such payment or taxdeduction:

Provided that all such records shall be retained for a periodof not less than nine years after the completion of the transactions,acts or operations to which they relate and shall be made readilyavailable for examination at any time during such period.

The aforesaid period of prescription shall in no casecommence before such person has ful ly complied with the






provisions of this article and of any rules made thereunder.(13) Any person who contravenes or fails to comply with the

provisions of this article or of any rules referred to in subarticle (1)shall be liable, on conviction, to a fine (multa) of not less than onehundred and sixteen euro (116) and not exceeding one thousandand one hundred and sixty euro (1,160) or to imprisonment for at e rm no t e xceed ing s i x mon ths o r t o bo th such f i ne andimprisonment, and to a further fine (multa) of not less than foureuro (4) but not exceeding twenty-three euro (23) for every dayduring which the offence continues after conviction:

Provided that the Commissioner may compound anyoffence under this subarticle and may before judgment stay orcompound any proceedings thereunder:

Provided further that the offence under this subarticle shallcontinue to subsist until the offender shall have conformed andcomplied with the provisions of this article or of any rules referredto therein.

Return to be furnished of income received on account of, or paid to, other persons.Amended by:IX. 1999.5;XIII. 2004.87;I. 2008.5.

24. (1) Where any person in any capacity whatsoever -(a) receives any profits or income to which the provisions

of the Income Tax Acts apply which belong to someother person; or

(b) pays to some other person, or to his order, any profitsor income to which the provisions of the Income TaxActs apply and which belong to such other person,

then the Commissioner may give notice to such first-named personrequiring him to furnish within the time limited by such notice, notbeing less than thirty days from the date of service of such notice, areturn containing -

(i) a true and correct statement of all such profitsand income; and

(ii) the name and address of every person to whomthe same belong or are paid:

Provided that, subject to the provisions of article 10A, nosuch person shall, by virtue of this article, be obliged to discloseany information in relation to another person which he holds in thecapacity of a trustee of a trust or which is otherwise covered by theduty of professional secrecy.

(2) A notice under subarticle (1) may be given by theCommissioner so as to apply either generally to persons to whomsuch profits or income as are mentioned in that subarticle belong orare paid or to any particular person or class of persons as aforesaid.

Returns to be furnished by trustees.Added by:XIII. 2004.88.

24A. (1) The Commissioner may give notice to a trustee of atrust requiring him to furnish, within the time limited by suchnotice, not being less than thirty days from the date of service ofsuch notice, a return containing -


Cap. 123.

(a) a true and correct statement, certified by a warrantholder referred to in article 57, of the incomeattributable to such trust as referred to in article 27B ofthe Income Tax Act; and

Cap. 123.

(b) (i) the names and addresses of those beneficiaries towhom income has been allocated as provided inarticle 27D(4) of the Income Tax Act, togetherwith the relative amounts so allocated; and

(ii) the amount, date of allocation, type and countryof source of the income so allocated for eachbeneficiary referred to in subparagraph (i).

(2) (a) A return under the provisions of this article shall bedeemed to be a return required to be furnished underthe provisions of article 10.

(b) A trustee who issues a false certificate to theCommissioner shal l be gui l ty of making a fa lsestatement within the meaning of article 52(1)(b).

Returns to be furnished by settlors.Added by:XIII. 2004.88.Amended by:L.N. 425 of 2007.

24B. Where -(a) the settlor of a trust is a person resident in Malta; and(b) none of the trustees of such trust is a person resident in

Malta; and(c) property is settled into such trust after such date as the

Minister responsible for finance may, by notice in theGazette, appoint,

the said settlor shall inform the Commissioner of the property sosettled together with a copy, where applicable, of the relevant trustinstrument or of any other document evidencing the existence ofs u c h t r u s t . T h i s i n f o r m a t i o n s h a l l b e s u b m i t t e d t o t h eCommissioner by not later than thirty days from the date of therelevant settlement. Any settlor who fails to comply with theprovisions of this article shall be guilty of an offence and liable onconviction to a fine (multa) of not less than one hundred andsixteen euro (116) and not exceeding one thousand and onehundred and sixty euro (1,160) and to a further fine (multa) of notless than four euro (4) but not exceeding twenty-three euro (23) forevery day during which the offence continues after the lapse of thesaid thirty days.

Powers of the Commissioner to request information.Added by:II. 2005.34.Amended by:I. 2008.6.

24C. For the purpose of ensuring compliance with the provisionsof the Income Tax Acts, the Commissioner may:

(a) demand and request from any person the production ofinformation which, in the opinion of theCommissioner, relates to the income or the economicactivities of any other person or class of persons;

(b) inspect and request the production of any books,records or documents or a copy or extract thereof,which, in the opinion of the Commissioner, relate tothe income or the economic activity of any person orclass of persons:




Provided that, subject to article 10A, the informationrequested under this article may not include:

Cap. 377.

(i) any information falling within the definition of a"professional secret" or "secret" in terms ofarticle 2 of the Professional Secrecy Act; or

Cap. 440.

(ii) any information falling within the definition of"sensitive personal data" in terms of article 2 ofthe Data Protection Act:

Cap. 440.

Provided further that, subject to article 10A, where anysuch information is protected by professional secrecy or theprovisions of the Data Protection Act and such protection is for thebenefit of any person, such information in respect of any otherperson shall be given excluding therefrom the name of the personin whose interest such protection is given.

Occupiers to furnish return of rent payable.

25. The Commissioner may give notice in writing to anyperson who is the occupier of any house, property, land orindustrial building requiring him to furnish within a reasonabletime a return containing -

(a) the name and address of the owner of such house,property, land or industrial building; and

(b) a true and correct statement of the rent payable andany other consideration passing therefor.

Return of lodgers and inmates.

26. The Commissioner may give notice in writing to anyperson requiring him within the time limited by such notice, notbeing less than thirty days from the date of service of such notice,to furnish a return containing the name of any lodger or inmate whois at the date of the notice resident in his house, hotel or institution,and has been so res ident , except for temporary absences ,throughout the preceding three months.

Certain partnerships.Amended by:V. 2012.45;XIII. 2015.121;XV. 2016.27.Cap. 123.

27. (1) Where income from any source accrues to or isreceived by a partnership that is carried on by any two or morepersons jointly and the partnership is not a "company" in terms ofarticle 2 of the Income Tax Act (including, for the avoidance ofdoubt, partnerships in respect of which no election in terms of sub-article (6) of this article is in force), the income of any partner fromthe partnership, shall be deemed to be the share to which he wasentitled during the year preceding the year of assessment in theincome of the partnership, such income being ascertained inaccordance with the provisions of the Income Tax Acts and shall beincluded in the return of income to be made by such partner underthe provisions of the Income Tax Acts.

(2) The precedent partner, that is to say the partner who of thepartners resident in Malta -

(i) is first named in the agreement of partnership, or(ii) is the precedent acting partner if the partner

named with precedence is not an acting partner,shall, when required by the Commissioner, make and deliver areturn of the income of the partnership for any year, such income





being ascertained in accordance with the provisions of the IncomeTax Acts, and declare therein the names and addresses of the otherpartners in the firm together with the amount of the share of thesaid income to which each partner was entitled for that year; and -

(a) where no partner is resident in Malta, the return shallbe made and delivered by the attorney, agent, manageror factor of the firm resident in Malta; and

(b) the provisions of the Income Tax Acts with respect tothe failure to deliver returns or particulars inaccordance with a notice from the Commissioner shallapply to any return required under this article.

(3) Where the Commissioner is not satisfied that income fromany source accrues to or is received by two or more persons jointly,the particular income shall be deemed to have accrued to or beenreceived by such person entitled to a share of such income as theCommissioner may elect, and assessment of tax shall be madeaccordingly.

Cap. 123.

(4) Where an assessment has been made in accordance with theprovisions of subarticle (3), the partnership shall not be consideredto be a body of persons for the purposes of article 60 of the IncomeTax Act.

(5) Nothing in this article contained shall prevent the decisionof the Commissioner in the exercise of any discretion given to himfrom being questioned in an appeal in accordance with articles 35and 37.

Cap. 123.

(6) Any partnership or EEIG referred to in sub-paragraph (iii)of paragraph (a) or sub-paragraph (ii) of paragraph (b) of thedefinition "company" in article 2(1) of the Income Tax Act shall beentitled to make an election in writing to be treated as a companyfor all purposes of the Income Tax Acts, and in such case, theprovisions of this article shall not be applicable thereto. Such anelection shall be made on such form and under such conditions asthe Commissioner may determine and shall be effected not laterthan sixty days after the date of setting up of the partnership orEEIG as the case may be:

Provided that if no such election is made, the taxation of thepartnership or EEIG, as the case may be, shall be regulated by theprovisions of this article:

Provided further that whether or not the partnership orEEIG elects to be treated as a company or otherwise, the status ofthe said partnership or EEIG shall remain effective until such timeas the Commissioner, at his sole discretion and for a reasonablecause, authorises a change following a request in writing made bythe partnership or EEIG, as the case may be, on such form andunder such conditions as the Commissioner may determine.

Signature of notices.Amended by:II. 2003.45.

28. (1) Every notice to be given by the Commissioner underthe Income Tax Acts shall be signed by the Commissioner or bysome person or persons from time to time appointed by him for thatpurpose, and every such notice, including a receipt for payment of




tax, shall be valid if the signature of the Commissioner or of suchperson or persons is duly printed, stamped or written thereon:

Provided that any notice in writing under the provisions ofthe Income Tax Acts to any person requiring him to furnishparticulars to the Commissioner, or any notice under the IncomeTax Acts requiring the attendance of any person or witness beforethe Commissioner shall be personally signed by the Commissioneror by any person duly authorised by him.

(2) A signature attached to any notice and purporting to be thesignature of any person so appointed shall be taken to be thesignature of that person until the contrary be shown.

Service of notices.Amended by:I. 2010.46.

29. (1) Notice may be served on a person either personally orby being sent by post to his last known business or private address,and shall in the latter case unless the contrary is proved be deemedto have been served, in the case of persons resident in Malta, notlater than the third day succeeding the day when posted, and in thecase of persons not so resident, the day succeeding the day onwhich the notice would have been received in the ordinary courseby post, and in proving such service it shall be sufficient to provethat the letter containing the notice was properly addressed andposted:

Provided that where such notice is not made because thetaxpayer could not be found or for other reasons attributable to himand the Commissioner publishes a notice in the Gazette and in oneor more daily newspapers stating that a notice has been made andinviting the taxpayer to call for it at the Department, then suchnotice shall also be deemed to have been duly notified.

Free postage.(2) All returns, additional information and resulting correspon-dence and payment of tax under the provisions of the Income TaxActs may be sent free of postage to the Commissioner in envelopesmarked "Income Tax".

Time and date for delivery of returns, etc., and for payments.Added by:IX. 1999.6.

29A. (1) Any period or date laid down in or under the IncomeTax Acts for the furnishing, delivery or service of a return, noticeor other document to or on the Commissioner or for any payment tothe Commissioner shall be deemed to expire at noon of the last dayof that period or of that date or at such later time as may beprescribed.

Cap. 252.

(2) When the date on which a return, notice or other documentis to be furnished, delivered or served or deemed to be served or onwhich a payment is to be made in terms of any provision of this Actfalls, were it not for the provisions of this subarticle, on a Saturdayor a public holiday as established in the National Holidays andOther Public Holidays Act, that date shall be deemed to fall on thefirst working day, other than a Saturday, following the saidSaturday or public holiday.




PART V

AssessmentsAssessments relating to years preceding the year of assessment 1999.Substituted by:IX. 1999.7.Amended by:II. 2004.50.

30. (1) Where a person has delivered a return of income forany year of assessment preceding the year of assessment 1999 theCommissioner may -

(a) accept the return and make an assessment accordingly;(b) after considering such further returns, books or

evidence, if any, as may be produced before orobtained by him, refuse to accept the return and to thebest of his judgement determine by order in writing theamount of the chargeable income of the person andassess him accordingly.

(2) Where a person has not delivered a return of income for anyyear of assessment preceding the year of assessment 1999 and theCommissioner is of the opinion that such person is liable to pay tax,he may, according to the best of his judgement, determine theamount of the chargeable income of such person and assess himaccordingly, but such assessment shall not affect any liabilityotherwise incurred by such person by reason of his failure orneglect to deliver a return.

(3) Where it appears to the Commissioner that a person has notbeen assessed or has been assessed at a lesser amount than thatwhich ought to have been charged for any year of assessmentpreceding the year of assessment 1999, the Commissioner mayassess such person at such amount or additional amount as,according to his judgement, ought to have been charged and theprovisions of subarticle (1)(b) shall apply to such an assessment.

(4) An assessment for a year of assessment made pursuant toany of the foregoing provisions of this article shall be made withinthat year of assessment or within eight years after the expirationthereof:

Provided that in cases where there has not yet been a finaldecision or a final judgement, the notification of an assessment tothe taxpayer after the expiration of the periods specified in thissubarticle shall not constitute and shall not be deemed to have everconstituted a reason for the said assessment or notice thereof beingdeclared prescribed, time-barred or otherwise quashed, if suchassessment is delivered by not later than the 31st December, 2007:

Provided further that where such notification is not made bythe 31st December, 2007 because the taxpayer could not be foundor for other reasons attributable to him, such assessment shall bedeemed to have been duly notified if, not later than 31st December2008, the Commissioner publishes a notice in the Gazette and inone or more daily newspapers stating that such assessment has beenmade and inviting the taxpayer to call for it at the Department.

(5) Notwithstanding the provisions of subarticle (4), where aperson has not made to the Commissioner the returns required bythe Income Tax Acts for any year of assessment preceding the yearof assessment 1999 or a full and true disclosure of all material facts


necessary for his assessment for any such year and there has beenan avoidance of tax, the Commissioner, where he is of the opinionthat the avoidance of tax is due to fraud or evasion, may at any timeassess such person at such amount or addit ional amount asaccording to his judgement ought to have been charged and takeaction for the payment of tax, additional tax and any penalty.

(6) Where in the opinion of the Commissioner there has beenfraud or evasion as aforesaid, such decision shall be subject toappeal under the provisions of articles 35 and 37.

Assessment, and determinations relating to the year of assessment 1999 and subsequent years.Substituted by:IX. 1999.7.Amended by:II. 2003.46;I. 2010.47;L.N. 336 of 2010;XII. 2014.61.

31. (1) Where a person has delivered a return of income underarticle 10 that includes a self-assessment for the year of assessment1999 or any subsequent year of assessment, the Commissioner shalldetermine the chargeable income, the tax chargeable thereon andthe tax payable by or repayable to that person for that year ofassessment in the amounts indicated by that person in the self-assessment, making such arithmetical adjustments as may result tobe necessary on the basis of the information contained in thatreturn.

(2) Where a person has made an election under article 12 for ayear of assessment the Commissioner shall, on the basis of theinformation in his possession, determine the chargeable income,the tax chargeable thereon and the tax payable by or repayable tothat person for that year of assessment.

(2A) Where a person disagrees with the Commissioner’sdetermination made in accordance with the provisions of sub-articles (1) or (2), such person may file an adjustment form (AF) onsuch form as the Commissioner may determine, within five yearsf r o m t h e d a t e o n w h i c h t h e p e r s o n i s n o t i f i e d o f s u c hdetermination:

Provided that, notwithstanding any other provision of thisAct, any interest payable by the Commissioner shall only becomedue if paid later than one year from the filing of the said adjustmentform.

(3) Where a person has not delivered a return of income for theyear of assessment 1999 or any subsequent year and has not madean election under article 12 or, having made such an election has,after being given notice by the Commissioner to make a return asprovided in ar t icle 13, fai led to f i le such a return, and theCommissioner is of the opinion that such person is liable to pay tax,he may determine the amount of the tax payable by that person forthat year of assessment on the basis of an estimate made in suchmanner and by such method as the Commissioner deems fit withoutprejudice to any liability otherwise incurred by that person byreason of his failure or neglect to deliver a return.

(3A) Where an estimate has been made in the circumstancesmentioned in subarticle (3) and the return has still not beendelivered, the Commissioner may make an assessment under theprovisions of subarticle (5) on the person concerned, without theneed to have previously notified the said person that an enquiry isbeing conducted into his tax declarations and liabilities.


(4) The Commissioner may make such enquiries andverifications as he deems fit with respect to any tax payable by orrepayable to a person and may make such adjustments to adetermination made under the other provisions of this article asmay be agreed upon in writing with that person or as may berequired in accordance with article 13(6).

(5) Where it appears to the Commissioner that the tax payableby a person for the year of assessment 1999 or any subsequent yearof assessment has been determined at a lesser amount than thatwhich ought to have been charged, the Commissioner may afterconsidering such further returns, books or evidence, if any, as maybe produced before or obtained by him, to the best of his judgementmake an assessment of the chargeable income of that person, thetax chargeable thereon and the tax payable by or repayable to thatperson for that year of assessment, and where the Commissionerafter having made an assessment is of the opinion that any tax soassessed has been assessed at a lesser amount than that which oughtto have been charged he may, in the same manner, make anadditional assessment or assessments:

Provided that if there is evidence that, after being requestedby the Commissioner by means of a notice in writing, such personfailed to produce without any reasonable excuse any records,documents, accounts and electronic data within thirty days from thedate of service of such notice and an order in writing by theCommissioner referred to in article 33(5) has been issued, suchperson shall not be allowed to produce such records, documents,accounts and electronic data before the Administrative ReviewTribunal or in any Court of law.

(6) An assessment or additional assessment for a year ofassessment under subarticle (5) shall be made not earlier than thetime prescribed under article 10(1) for the submission of the returnof income for that year and not later than five years from the end ofthe year in which a return of income or a further return for that yearwas furnished or in which an election under article 12 for that yearwas made.

(7) Notwithstanding the provisions of subarticle (6) where aperson:

(a) has furnished the Commissioner with a return orreturns and has not made therein a full disclosure of allmaterial facts relevant to the determination of hisincome and allowable deductions; or

(b) for the purpose of avoiding tax or through gross orwilful neglect has furnished the Commissioner with areturn which is incorrect or misleading in any materialrespect,

an assessment or an additional assessment under subarticle (5) maybe made at any time after the time laid down in accordance withthis Act for the submission of the return of income for that year.

(8) A decision on the existence of any circumstance thatwarrants the application of the provisions of subarticle (7) shall be


subject to appeal under the provisions of articles 35 and 37.(9) A determination made pursuant to subarticle (1), (2) or (3)

shall not be construed as being an assessment for any of thepurposes of the Income Tax Acts.

Assessment and payment of tax in foreign currency.Added by:IX. 1999.7.

31A. The tax chargeable on the income of a company shall bedeclared, determined, assessed and paid in the currency (or whereapplicable, in currencies pro rata) in which its share capital isdenominated and any refunds and repayments made in accordancewith the provisions of the Income Tax Acts in respect of such taxshall be made in the same currency (or, where applicable, incurrencies pro rata) in which such tax was paid.

Cancellation of assessments.Amended by:XXIII. 1995.2;I. 1999.2;II. 2002.80.

32. (1) The Commissioner may for the purposes of the IncomeTax Ac t s cance l any assessment r a i sed by h im, and suchcancellation shall be without prejudice to the raising of anyassessment required to be raised under this Act in replacement ofthe assessment so cancelled which shall be deemed not to havebeen raised.

(2) Nothing in this article contained shall empower theCommissioner to cancel or raise any assessment for any year wheresuch cancellation or raising of any assessment would involve theopening of any matter which has been determined on appeal for thatyear.

(3) Notwithstanding any other provisions of the Income TaxActs where more than eight years have elapsed since the expirationof the year of assessment to which an assessment raised by theCommissioner before 1st January, 1992 refers and such assessmentis still not final and conclusive in terms of article 38, and it appearsto the Commissioner that such assessment may be invalid or voidbecause of any mistake, defect or omission by the Commissioner inmaking such assessment or in the notice thereof, the Commissionermay within ten years from 1st January 1992 or within two yearsfrom the date the taxpayer applies to the Commissioner in writingindicating as a further ground of objection such mistake, defect oromission raise a new assessment in terms of article 30 for the yearof assessment in question and the provisions of the Income TaxActs as to notice of assessment, appeal and other proceedings underthe Income Tax Acts shall apply to such an assessment and to thetax charged thereon:

Provided that:(i) the provisions of this subarticle shall similarly

apply to those assessments which have beenraised by the Commissioner on 1st January 1992or any subsequent date other than assessmentsraised under article 31 of the Act; and

(ii) where a new assessment in terms of article 30and to which this subarticle or paragraph (i) ofthis proviso refers has not been raised by theCommissioner within the period referred to inthis subarticle, the Commissioner may at any


time raise a new assessment on the taxpayer onall or any part of the chargeable income of thetaxpayer as declared by him for the year ofassessment in question upon which no validassessment has been raised; and except for theprovisions of article 30(4), the provisions of theIncome Tax Acts as to notice of assessment,appeal and other proceedings under the IncomeTax Acts shall apply to such assessment and toany tax chargeable thereunder.

Power of the Commissioner to revise assessment in case of objection.Amended by:XXIII. 1995.3;XX. 1996.21.

33. (1) The Commissioner shall cause to be served personallyon or sent by registered post to each person assessed to tax a noticeaddressed to him at his usual place of abode or business, stating theamount of his chargeable income and the amount of tax payable byhim and informing him of his rights under the provisions ofsubarticle (2).

(2) If any person disputes the assessment he may apply to theCommissioner, by notice of objection in writing, to review and torevise the assessment made upon him. Such application shall stateprecisely the grounds of his objection to the assessment and shallbe made within thirty days from the date of the service of the noticeof assessment:

Provided that the Commissioner, upon being satisfied thatowing to absence from Malta, sickness or other reasonable cause,the person disputing the assessment was prevented from making theapplication within such period, shall extend the period as may bereasonable in the circumstances:

Provided also that no such notice may be validly enteredagainst any assessment unless -

(a) the return for the respective year of assessment hasbeen filed in terms of articles 10 and 11 before thenotice is given to the Commissioner;

Cap. 123.

(b) the tax not in dispute for the said year of assessmenthas been paid in full before the time limit set out inarticle 42(1) where the main income of the person forthe year immediately preceding the said year ofassessment is derived from sources other than thosefalling under article 4(1)(b) and (d) of the Income TaxAct which are subject to deduction of tax under thePAYE rules:

Provided further that where any person has alreadydelivered any notice under this article against any assessment andsuch assessment is still not final and conclusive in terms of article38 he shall comply with the preceding proviso hereto by the 28thJune, 1996, otherwise the notice given will be rejected and theassessment objected to will become final and conclusive on suchdate.

(3) On receipt of the notice of objection referred to insubarticle (2), the Commissioner may require the person giving thenotice of objection to furnish such particulars or information as the




Commissioner may deem necessary with respect to the income ofthe person assessed and to produce all books or other documents inhis custody or under his control relating to such income, and maysummon any person who, he thinks, is able to give evidencerespecting the assessment to attend before him and produce allbooks or other documents in his custody or under his control andmay examine such person on oath or otherwise:

Provided that the clerk, agent, employee or other personconfidentially employed in the affairs of the person to be chargedand the parents, spouse or children of such person shall not beexamined except on the request of the assessee:

Provided further that except at the request of the assessee,no person shall be examined in relat ion to any informationconcerning the assessee in respect of which the said person is underthe duty of professional secrecy.

(4) In the event of any person assessed, who has objected to anassessment made upon him, agreeing with the Commissioner as tothe amount at which he is liable to be assessed, the assessment shallbe amended accordingly, and notice of the tax payable shall beserved upon such person.

(5) If no agreement is reached the Commissioner shalldetermine the tax by order in writing:

Provided always that in the event of any person who, underthe provisions of subarticle (2), has applied to the Commissionerfor a revision of the assessment made upon him, failing to agreewith the Commissioner as to the amount at which he is liable to beassessed, his right of appeal under the provisions of this Act,against the assessment made upon him, shall remain unimpaired.

PART VI

AppealsAdministrative Review Tribunal.Substituted by:L.N. 336 of 2010.Amended by:L.N. 390 of 2010.Cap. 490.

34. (1) The Administrative Review Tribunal established byarticle 5 of the Administrative Justice Act, hereinafter referred toas "the Tribunal", shall be competent to hear and determine appealsin accordance with the provisions of article 35.

(2) The Tribunal shall carry out such functions as are assignedto it in terms of this Act.

Cap. 490.(3) The provisions of the Administrative Justice Act, in so faras they apply to the Administrative Review Tribunal, shall apply toany proceedings before the said Tribunal and the words "publicadministration" in the said enactment shall be construed as areference to the Commissioner.

(4) The Tribunal shall have the power to summon any person togive evidence or to produce books or other documents before it:

Provided that –(i) the clerk, agent, employee or other person

confidentially employed in the affairs of the appellantand the parent, spouse or children of such appellant




shall not be called to give evidence or to be examinedexcept on the request of the appellant;

(ii) any person, other than the Commissioner, who has orhas had any official duty, or is or has been employed,in the administration of the Income Tax Acts, shall notbe called to give evidence or to be examined inconnection with any official matter concerning theassessment under appeal except on the request of theCommissioner;

(iii) except at the request of the appellant, no person shallbe examined in relation to any information concerningthe appellant in respect of which the said person isunder the duty of professional secrecy.

(5) The Tribunal members shall not be personally liable for anyact or default of the Tribunal done or omitted to be done in goodfaith in the course of the operations of the Tribunal.

Cap. 490. (6) The provisions of article 25 of the Administrative JusticeAct shall apply to any proceedings pending before the Board ofSpecial Commissioners and any such proceedings shall be assignedto the Administrative Review Tribunal in terms of the aforesaidarticle 25 with effect from 1st June, 2010:

Provided that any proceedings pending before the Board ofSpecial Commissioners and which have already commenced on the1st June, 2010, shall remain pending before the said Board ofSpecial Commissioners for decision, and the provisions of this sub-article shall not apply to those proceedings.

Cap. 490.

(7) Notice of the decision on appeal and the reasons thereforshall be given in writ ing to the appellant who shall also beinformed of his rights of any further appeal in terms of theAdministrative Justice Act.

Appeal.Amended by:IV. 2007.27;L.N. 336 of 2010;XII. 2014.62.

35. (1) Any person who, being aggrieved by an assessmentmade upon him, has failed to agree with the Commissioner in themanner provided in article 33(4) may enter within thirty days afterthe date of service upon him of notice of the refusal of theCommissioner to amend the assessment as desired, an appealagainst such assessment to the Administrative Review Tribunal.

(2) Every person appealing shall appear before the Tribunaleither in person or by agent on the day and at the time fixed for thehearing of the appeal:

Provided always that if it be proved to the satisfaction ofthe Tribunal that owing to absence from Malta, sickness or otherreasonable cause, any person is prevented from attending at thehearing of his appeal on the day and at the time fixed for thatpurpose, the Tribunal may postpone the hearing of such appeal forsuch reasonable time as it thinks necessary for the attendance of theappellant.

(3) The onus of proving that the assessment complained of isexcessive shall be on the appellant.

(4) Subject to the provisions of subarticle (3), the Tribunal





shall confirm, reduce, increase or annul the assessment or makesuch order thereon as to it may seem fit.

(5) No appeal shall lie from the decision of the Tribunal excepton a question of law only.

(6) An appeal to the Tribunal made by a taxpayer or on hisbehalf cannot be withdrawn or discontinued except with theconsent of the Commissioner.

(7) The Tribunal may order the correction of any arithmeticalerror incurred in any of its decisions on an application served onthe other party and filed within ten days after the date of thedecision.

Certain provisions to be followed in the hearing of appeals.Amended by:IV. 2007.28;I. 2010.48;L.N. 336 of 2010.

36. The following provisions shall have effect for the purposesof any appeal made under article 35:

(a) the Tribunal shall summarily reject any appeal beforeit for any year of assessment and confirm theassessment complained of unless prima facie proof isbrought before it that, by the date on which the appealwas entered, appellant had filed under articles 10 and11 a return of his income chargeable for the said yearof assessment;

(b) notwithstanding the provisions of article 34(7), wherethe assessment complained of has been raised by theCommissioner in accordance with the provisions ofarticle 30(1)(b) or (2) or (3), or of article 31(5), noevidence shall be considered by the Tribunal assufficient to warrant any change in the assessmentconcerning that income if the person appealing againstthe Commissioner’s decision has failed to providewithout any reasonable excuse the records, documents,accounts and electronic data in accordance with theproviso to article 31(5);

(c) the Commissioner may at any time during the hearingof an appeal require a declaration by the Tribunal as towhether the appeal should be rejected and theassessment complained of confirmed in accordancewith the provisions of paragraph (a) or (b).

Appeals to the Court of Appeal.Amended by:VI. 2001.25;IV. 2007.29;L.N. 425 of 2007;L.N. 336 of 2010;XII. 2014.63.

37. (1) Any person who, having appealed to the Tribunal feelsaggrieved by its decision may, by application filed within twentydays from the date of the Tribunal’s decision, on a question of lawonly -

(i) where the total amount of tax, additional tax, fines andinterest in dispute at the time when the appeal waslodged before the Tribunal is less than one million andone hundred and sixty-five thousand euro (1,165,000),to the Court of Appeal (Inferior Jurisdiction); and

(ii) where the total amount of tax, additional tax, fines andinterest in dispute at the time when the appeal waslodged before the Tribunal is of one million and onehundred and sixty-five thousand euro (1,165,000) or


more, to the Court of Appeal.(2) The Commissioner may, if he is dissatisfied with the

decision of the Tribunal, appeal against the decision on a questionof law only to the court that is competent to take cognizance of theappeal in accordance wi th subar t ic le (1) ( i ) and ( i i ) by anapplication filed within twenty days from the date of the Tribunal’sdecision.

(3) Unless rules made hereunder provide a longer period, sevenclear days’ notice shall be given to the parties of the date fixed forthe hearing of the appeal.

(4) The court may confirm, reduce, increase or annul theassessment or make such orders thereon as it may deem fit.

(5) Notice of the amount of tax payable under the assessmentas determined by the court shall be served by the Commissioner,either personally on, or by registered post to, the other party.

(6) The Commissioner shall publish within a reasonable timeall decisions of the court giving the facts of the appeal and thearguments.

(7) The cost of the appeal shall be in the discretion of the Courtof Appeal or of the Court of Appeal (Inferior Jurisdiction), as thecase may be, and shall be a sum fixed by the registrar.

(8) The Minister responsible for justice may by regulationsunder this subarticle establish the fees payable in the registry of thecourts in relation to the filing of judicial acts in connection with anappeal to the Court of Appeal and to the Court of Appeal (InferiorJurisdiction), as the case may be, under this article:

Cap. 12.Provided that until such fees have been so established by

the Minister, the fees contained in Schedule A to the Code ofOrganization and Civil Procedure shall apply.

Assessments or amended assessments to be final.Amended by:I. 2010.49.Cap. 123.

38. Where no valid objection or appeal has been lodged withinthe time limited by this Part against an assessment or order asregards the amount of the chargeable income assessed thereby orthe tax rebate granted in terms of article 57 of the Income Tax Act,or where the amount of the chargeable income or tax rebate hasbeen agreed to under article 33(4), or where the appeal has beenwithdrawn or discontinued, or where the amount of such chargeableincome or tax rebate has been determined on objection or appeal,the assessment or order as made or agreed to or determined onappeal, as the case may be, shall be final and conclusive for allpurposes of the Income Tax Acts as regards the amount of suchchargeable income or tax rebate:

Provided that nothing in this Part shall prevent theCommissioner from making any refund under the provisions ofarticle 48 or any assessment or additional assessment for any yearof assessment which does not involve reopening of any matterwhich has been determined on appeal for the year.





Errors, etc., in assessments and notices.

39. (1) No assessment, warrant or other proceeding purportingto be made in accordance with the provisions of the Income TaxActs shall be quashed, or deemed to be void or voidable, for wantof form, or be affected by the reason of a mistake, defect oromission therein, i f the same is in substance and effect inconformity with or according to the intent and meaning of theIncome Tax Acts or any Act amending the same, and if the personassessed or in tended to be assessed or affected thereby isd e s i g n a t e d t h e r e i n a c c o r d i n g t o t h e c o m m o n i n t e n t a n dunderstanding.

(2) An assessment shall not be impeached or affected -(a) by reason of a mistake therein as to -

(i) the name or surname of a person liable; or(ii) the description of any income; or

(iii) the amount of tax charged;(b) by reason of any variance between the assessment and

the notice thereof:Provided that in cases of assessment, the notice thereof

shall be duly served on the person intended to be charged and suchnotice shall contain, in substance and effect, the particulars onwhich the assessment is made.

(3) In the case of a body of persons it shall be sufficient for thepurposes of the Income Tax Acts if only the name of the body ofpersons appears on any notice issued thereunder by or on behalf ofthe Commissioner.

(4) Where any appeal has been entered from any assessmentraised by the Commissioner and such assessment is by finaldecision or judgment declared invalid or void, the Commissionermay, within one year of the final decision or judgment as the casemay be, where a new assessment cannot be issued under any otherprovision of the Income Tax Acts, raise a new assessment on thetaxpayer on all or any part of the chargeable income of the taxpayeras declared by the taxpayer for the year of assessment in questionupon which no valid assessment has been raised; and the provisionsof the Income Tax Acts as to notice of assessment, appeal and otherproceedings under the Income Tax Acts shall apply to suchassessment and to any tax chargeable thereunder.

PART VII

CollectionExecutive title.Amended by: XXIII. 1995.4;V. 1998.6;II. 2004.51;I. 2010.50;IV. 2011.61.Cap. 12.Cap. 123.

40. (1) The following shall constitute an executive title withinthe meaning and for the purposes of Title VII of Part 1 of BookSecond of the Code of Organization and Civil Procedure, namely:

(a) the notice referred to in article 73(4)(c) of the IncomeTax Act;

(b) the notice referred to in article 23(7);(c) the final and conclusive assessment or order referred

to in article 38;





(d) the notice referred to in article 42(6);(e) the notice referred to in article 43(6);(f) the notice referred to in article 46(1) and the notice of

assessment and demand in writing by theCommissioner referred to in article 46(3);

(g) the notice referred to in article 47A(2):Provided that except in the cases referred to in paragraph

(f), the procedure laid down in articles 44(1)(b) or 44(2A)(c) shallbe followed in all cases before payment is enforced in virtue ofsuch title.

(2) Where in accordance with the provisions of articles44(1)(b) or 44(2A)(c), a payment is enforceable against a body ofpersons in virtue of an executive title, the Commissioner may,without the need of any other act, proceed with such enforcementagainst every officer thereof who is personally liable therefor interms of article 7 or of any rules made thereunder.

Procedure in cases where objection or appeal is pending.

41. (1) Where notice of objection or appeal against anassessment has been given, the Commiss ioner may, in h isdiscretion, keep in abeyance the collection of not less than ninetyper cent of that part of the tax assessed thereunder which is indispute.

(2) This article shall not apply to the tax deductible inaccordance with the provisions of article 23 and to the tax payablein accordance with the provisions of article 42(2).

Time within which payment is to be made. Amended by:XX. 1996.21;IX. 1999.8;XII. 2014.64;XXXVII. 2014.5;XV. 2016.28.

42. (1) Tax due for any year of assessment preceding the yearof assessment 1999 shall be payable within the period ending onthe last day of the first calendar month immediately following thatduring which service has been made of a notice of assessmentunder article 33.

(1A) Tax chargeable for the year of assessment 1999 or anysubsequent year of assessment shall be due and payable by not laterthan such date, being a date not earlier than the tax return date asdetermined in accordance with article 10, during that year, in theIncome Tax Acts referred to as the "tax settlement date", as may beprescribed.

(2) Notwithstanding anything contained in subarticle (1) and(1A), provisional tax shall be paid to the Commissioner in the yearimmediately preceding the year of assessment by every person inrespect of his liability for the year of assessment in such amountand in such manner and on such date as may be prescribed:

Provided that the provisions of this subarticle shall notapply to the income of any body of persons arising from activitiesrelating or ancillary to banking, sound or television broadcasting,film renting or insurance (excluding commissions derived from thesale of insurance by bodies of persons residing in Malta) in respectof the liability of such body of persons for any year of assessmentpreceding the year of assessment 1990.

(3) Apart from any payment of provisional tax which may be


due under the provisions of subarticle (2) -(a) every person shall make payments to be determined by

the Commissioner on account of the said person’soutstanding liability to tax for any year of assessmentin such amount and in such manner and on such date asmay be prescribed; and

(b) (Deleted by XV. 2016.28).(c) every person required to make a self assessment in

accordance with article 10(2), including any person towhom article 12 applies but who does not make anelection under that article for that year, shall, by notlater than the tax settlement date, pay the amount, ifany, that is required to be determined in that self-assessment as the amount of tax payable by that personfor that year of assessment;

(d) notwithstanding any other provision contained in thisAct or in any other law no person may set off againstthe tax payable for a year of assessment in accordancewith paragraph (c) any amount whatsoever, includingany amount repayable to him or due to him as a creditunder the Income Tax Acts for any other year ofassessment;

(e) for the purposes of paragraph (b) "provisionaltaxpayer" means any person, including a company,who derives any income or to whom any incomeaccrues which is not emoluments.

Cap. 123.(4) (a) Payment of tax due by individuals in terms of article

90A(7)(b) of the Income Tax Act shall be made by notlater than the 30th June of the year following therelevant year in respect of the income arising duringthe period January to December of the relevant year.This payment shall be accompanied by a statement ofaccounts indicating the taxable net profits for therelevant year.

(b) For the purposes of paragraph (a) -"relevant year" means the year during which theincome from part-time work is earned; and"taxable net profit" is the result of all incomes andexpenses in accordance with established accountingpractices but duly adjusted for income tax purposes.

Cap. 123.(c) Payment of tax due by persons in terms of article 31D

of the Income Tax Act shall be made by not later thanthe 30th June of the year following the relevant year,in respect of the gross rental income received duringthe period January to December of the relevant year.This payment shall be accompanied by the relevantf o r m w h i c h t h e C o m m i s s i o n e r m a y p r e s c r i b eindicating the gross rental income received for therelevant year. For the purposes of this paragraph"relevant year" means the calendar year during which




the gross rental income is received:

Cap. 123.

Provided that in the case of an individual whoexercises the option referred to in article 31D(6A) ofthe Income Tax Act, payment of tax shall be made bynot later than the 30th June 2015.

(5) If any person fails to pay any tax as prescribed under orpursuant to this article he shall be chargeable with the tax whichshould have been so paid and, in addition, with further tax orinterest as provided for in article 44, and such tax, additional taxand interest shall be recovered from such person in the samemanner as other tax assessed and charged upon him.

(6) For the purposes of subarticle (5) a notice by theCommissioner to any person showing the tax which should havebeen paid and any additional tax and interest to which he is liablefor having failed to pay the tax shall, unless the contrary is proved,be sufficient evidence that the amount shown in the said notice isthe amount due to be paid to the Commissioner by the said person.

(7) The powers conferred upon the Commissioner bysubarticles (5) and (6) shall be in addition to any right conferredupon him to commence proceedings in respect of an offence undersubarticle (8).

(8) (a) Any person who contravenes or fails to comply withthe provisions of this article or of any rules madethereunder shall be liable on conviction to a fine(multa) of not less than one hundred and sixteen euro(116) and not exceeding one thousand and one hundredand sixty euro (1,160) and to a further fine (multa) ofnot less than eleven euro (11) but not exceeding onehundred and sixteen euro (116) for every day duringwhich the offence continues.

(b) The Commissioner may compound any offence underthis article and may before judgment stay or compoundany proceedings thereunder.

(9) Notwithstanding anything contained in the precedingprovisions of this article, any tax payable by an internationaltrading company and by a company with respect to profits allocatedto the foreign income account shall not become payable before theearlier of:

(a) the date of distribution of such profits by the company;or

(b) eighteen months after the end of the accounting periodin which the aforesaid profits were made by thecompany.

Time limit within which payment is to be made by trustees.Added by:XIII. 2004.89.Cap. 123.

42A. Notwithstanding anything contained in article 42, taxpayable on the income attributable to a trust as defined in article27B of the Income Tax Act for any year of assessment, shall bepaid not later than the tax settlement date as defined in the IncomeTax Acts.




Advance Company Income Tax.Added by:II. 2007.24.Amended by:XIII. 2015.122.

Cap. 123.

42B. (1) In addition to the other provisions of this Part and inparticular articles 42 and 43 hereof a company shall also pay thetax chargeable on its income in the manner set out in this article.

(2) Upon the payment of a dividend from profits allocated tothe foreign income account or the Maltese taxed account the taxwhich a company is entitled to deduct in terms of article 59 of theIncome Tax Act in respect of such dividend together with anyadditional tax payable in terms of article 44(1)(a), after deductingany tax credits relative to the profits out of which the dividend ispaid excluding any tax credits relative to a claim for relief ofdouble taxation under the articles referred to in articles 74(a), (b)and (c) of the Income Tax Act, shall be referred to as AdvanceCompany Income Tax:

Cap. 123.

Provided that with effect from year of assessment 2015, theAdvance Company Income Tax shall be determined before deductingtax credits which such company may deduct from its tax otherwisepayable other than the tax credit referred to in article 74(d) of theIncome Tax Act.

(3) The amount of Advance Company Income Tax less anyclaim for relief of double taxation and any tax that the company haspaid, as at the date of payment contemplated herein, on the profitsout of which the said dividend is paid shall be paid by the companywithin sixty days the end of the month following that in which thedividend is paid.

(4) Where a dividend is paid out of profits earned in theaccounting period in which the dividend is paid the dividend shall,for the purpose of this article, be deemed to have been paid on thelast day of that accounting period.

(5) Where a payment of Advance Company Income Tax hasbeen made in accordance with this article, the amount so paid,excluding any additional tax included therein, shall be set-offagainst any other future payments of tax that the company isrequired to make on the profits out of which the dividend is paid.

(6) During the period from 1 January 2007 to the 31 December2010 the provisions of this article shall only be applicable to acompany which was a company registered in Malta on or after the 1January 2007, but was not resident in Malta before that date and toa company in respect of which paragraph (i) of the proviso toarticle 48(4A)(b) has been applied.




Gains or profits from transfer of property.Amended by:II. 2004.52;XIII. 2004.90;L.N. 425 of 2007;I. 2010.51;XV. 2016.29.Cap. 123.

Cap. 123.

43. (1) Where any person makes a transfer of propertyreferred to in article 5(1)(a) of the Income Tax Act, he shall -

(a) where the transfer is a transfer to which article 5A ofthe Income Tax Act applies, remit to theCommissioner a payment of tax, if any, in such amountand in such manner as is provided for in that article;

(b) in any other case, and irrespective of whether the gainsor profits, if any, derived from such a transfer arechargeable under the provisions of that article or underany other provision of the Income Tax Acts, remit tothe Commissioner within fifteen days of the relativetransfer a provisional tax payment equivalent to 7% or,where applicable, at the rate provided for in article5(9A) or 27G of the Income Tax Act, of theconsideration relating to the transfer of the property orof the value of the donation:Provided that in deeds of emphyteusis or sub-emphyteusis no account shall be taken of any yearlyground rent or sub-ground rent payable according tothe deed:

Cap. 123.Provided further that in the case of a transfer ofsecurities, as defined in article 5 of the Income TaxAct, involving a transfer of a controlling interest inaccordance with prescribed rules, the provisional taxpayment shall be equivalent to seven percent of thehigher of the market value and the consideration, andin the case of a transfer to which article 5(9A) of theIncome Tax Act applies, such payment shall be madewithin fifteen days from the date the chargeablecompany ceases to be a member of the group:

Cap. 123.

Provided also that in the case of a transfer of value insecurities, as provided for in subarticle (13)(b)(ii) ofarticle 5 of the Income Tax Act, the provisional taxpayment shall be equivalent to seven percent of thegains or profits referred to in the said subarticle.

(2) Provisional tax under this article shall not be payable inrespect of:

Cap. 123.(a) any transfer of assets not subject to tax under the

provisions of articles 5 and 12 of the Income Tax Actwhere the transferor submits to the Commissioner theprescribed form, stating which provision is applicable,and any other relevant documents which theCommissioner may deem necessary:

Cap. 123.Provided that provisional tax shall in any case be paidif article 33 of the Income Tax Act is applicable as aresult of claiming the exemption provided for underarticle 12(1)(u) of the said Act;

(b) transfer of property on deeds of partition;(c) transfer of shares in public companies.









Cap. 123.

(3) Saving the transfer of property referred to in subarticle(1)(a), the Commissioner may authorise any person chargeableunder article 5(1)(a) of the Income Tax Act, to pay provisional taxunder this article at a rate lower than that referred to in subarticle(1), if it can be proved that the gain is less than 20% of theconsideration or of the value of the donation as the case may be:

Cap. 123.Provided that in the case of a transfer of securities, as

defined in article 5 of the Income Tax Act, involving a transfer of acontrolling interest in accordance with prescribed rules, the twentypercent shall be calculated on the higher of the market value andthe consideration.

(4) (a) The tax paid by a person in respect of transfers referredto in subarticle (1)(a), shall not be available as a creditagainst that person’s tax liability or for a refund, as thecase may be, for the relevant year of assessment. Suchtax shall be separate and distinct from that paid or apayable under the provisions of article 42 and he shallnot be required to declare any such income, in anyreturn made pursuant to the Income Tax Acts.

Cap. 123.

(b) Any provisional tax paid for the purposes of subarticle(1)(b), during or in respect of the year preceding anyyear of assessment, shall be set off for the purpose ofcollection against the tax charged in respect of the saidyear of assessment and if there is an excess after theaforesaid set-off has been made, such excess shall berefunded in accordance with the provisions of article48. Such provisional tax shall be separate and distinctfrom that paid or payable under the provisions ofarticle 42 except for persons who have gains or profitsfrom immovable property falling under article 4(1)(a)of the Income Tax Act:

Provided that the tax paid and referred to in paragraph (b)of this subarticle shall not be set off or refunded as aforesaid unlessthe person who has paid the tax has declared the relative gains orprofits from the transfer in a return of income furnished inaccordance with article 10 for the year of assessment following thatduring which the gains or profits from the said transfer werederived.

(5) If any person fails to pay any provisional tax, as the casemay be, as provided under this article he shall be chargeable withthe tax which should have been so paid and, in addition, withfurther tax as provided for in article 44(1)(a), and such tax andadditional tax shall be recovered from such person in the samemanner as other tax assessed and charged upon him.

(6) For the purposes of subarticle (5) a notice by theCommissioner to any person showing the tax which should havebeen paid and any additional tax to which he is liable for havingfailed to pay the tax shall, unless the contrary is proved, besufficient evidence that the amount shown in the said notice is theamount due to be paid to the Commissioner by the said person.

(7) The powers conferred upon the Commissioner by





subarticles (5) and (6) shall be in addition to any right conferredupon him to commence proceedings in respect of any offence undersubarticle (8).

(8) Any person who contravenes or fails to comply with theprovisions of this article shall be liable on conviction to a fine(multa) of not less than one hundred and sixteen euro (116) and notexceeding one thousand and one hundred and sixty euro (1,160) orto imprisonment for any term not exceeding six months or to bothsuch fine and imprisonment, and to a further fine (multa) of not lessthan four euro (4) but not exceeding twenty-three euro (23) forevery day during which the offence continues after conviction:

Provided that the Commissioner may compound anyoffence under this art icle and may before judgment stay orcompound any proceedings thereunder.

(9) (a) The tax or provisional tax, as the case may be, payableunder this article shall be paid in such manner as maybe prescribed.

Cap. 364.

(b) Notwithstanding anything that may be provided for inthe rules where immovable property or any rightsannexed thereto are transferred by means of a publicdeed the notary publishing such deed shall have thesame duties and liability in connection with thecollection and payment of the tax or provisional tax, asthe case may be, payable on such deed in accordancewith this article as are by the Duty on Documents andTransfers Act imposed on notaries publishing suchdeeds, in connection with the duty chargeable andcollected on transfers in accordance with that Act. Anyfailure by a notary in connection with the collectionand payment of tax or provisional tax, as the case maybe, under this article shall for all purposes of the Dutyon Documents and Transfers Act, be deemed to be afailure of his duties under that Act.

Cap. 123.

Cap. 364.

(c) Where any assets the transfer of which is subject to taxon capital gains under article 5 of the Income Tax Act,is sold in a judicial auction, the Registrar of Courtsshall have the same duties with regard to thewithholding and payment of the tax or provisional tax,as the case may be, under this article as are underarticle 66 of the Duty on Documents and Transfers Actimposed on him in relation to the duty leviable ontransfers causa mortis under the said Act.








Additional tax and interest for non-payment of tax, and enforcement of payment.Amended by: XXIII. 1995.5;IX. 1999.9;II. 2003.47;II. 2004.53;II. 2009.30;I. 2010.52;XII. 2014.65;XV. 2016.30.Cap. 123.

44. (1) Where any tax payable within the periods provided forin article 42(1) or (2) or in article 43(1)(b) of this Act or in article9A(8) of the Income Tax Act, is not settled within the relevantperiod -

(a) additional tax equal to one per cent of the unpaid taxfor each calendar month or part thereof during whichsuch tax remains unpaid shall be added thereto, and theprovisions of the Income Tax Acts relating to thecollection and recovery of tax shall apply to thecollection and recovery of such additional tax;

(b) the Commissioner shall serve a demand note upon theperson assessed, and if payment is not made withinfifteen days from the date of the service of suchdemand note, the Commissioner may proceed toenforce payment in virtue of the executive titlereferred to in article 40 after two days from the serviceon the debtor of an intimation, for payment made bymeans of a judicial act, or as hereafter provided;

Cap. 123.

(c) additional tax charged under this subarticle shall notbe deemed to be part of any tax paid or payable for thepurposes of articles 59, 73, 76 or 89 of the Income TaxAct, or articles 23, 43, 51 or 52, or any rules madethereunder.

(2) The Commissioner may, in his discretion, remit wholly orin part any additional tax chargeable under subarticle (1):

Provided that no such remission shall be effected by theCommissioner unless he is satisfied that the person liable for thepayment of the tax was prevented from making payment within therespective periods owing to his absence from Malta or serioussickness or for such other cause as the Minister responsible forfinance may prescribe from time to time.

(2A) When any tax is not paid by the date on which it is payablein terms of the relevant provisions of the Income Tax Acts -

(a) interest at the rate of one per cent of the unpaid taxshall be charged thereon from the tax settlement datefor each calendar month or part thereof during whichsuch tax remains unpaid and the provisions of theIncome Tax Acts relating to the collection andrecovery of tax shall apply to the collection andrecovery of such interest:Provided that for any period or part thereof commencingon or after 1st January 2009, interest shall be calculatedat the rate of point seven five percent (0.75%) per monthor part thereof and the total interest shall not exceed theamount of the said tax:Provided further that, for any period or part thereofcommencing on or after 1st January 2014, interest shallbe calculated at the rate mentioned in the precedingproviso or at such lower rate as the Minister may, fromtime to time, prescribe by rules and the total interest shall





not exceed the amount of the said tax;(b) an amount of tax shown as payable for a year of

assessment by a person in a determination or anassessment made under article 31 shall unless and untilit is substituted by another amount by means of asubsequent determination or assessment be deemed tobe the tax payable for that year of assessment for thepurpose of paragraph (a) regardless of the date whenthe said determination is made or when the assessmentbecomes final and conclusive;

(c) the Commissioner shall serve a demand note upon theperson by whom any tax is due and if payment is notmade within fifteen days from the date of the serviceof such demand note, the Commissioner may proceedto enforce payment in virtue of the executive titlereferred to in article 40 after two days from the serviceon the debtor of an intimation for payment made bymeans of a judicial act.

(2B) Notwithstanding the provisions of subarticle (2A):(a) no interest shall run on any tax payable by a person for

any year of assessment if the Commissioner hasdetermined and directed by notice in writing given to apayor in accordance with rules made pursuant toarticle 23 that deductions be made from emolumentspayable to that person to cover the said tax and if thatnotice has not been revoked by a notice in writinggiven by the Commissioner to that person;

Cap. 123.

(b) no interest shall run on any additional tax chargedpursuant to the provisions of article 56(12) of theIncome Tax Act;

Cap. 123.

(c) no interest shall run on any tax payable incircumstances where a person has taken action under aMutual Agreement Procedure in terms of anarrangement referred to in article 76 of the Income TaxAct including Convention 90/436/EEC of 23 July 1990on the elimination of double taxation in connectionwith the adjustment of profits of associatedenterprises, for the period between the date when thesaid action under the Mutual Agreement Procedure isinitiated and the date when the issue is concludedunder the said procedure;

Cap. 123.

(d) No interest shall run on any tax payable by any personto the Commissioner when the non-payment of that taxrenders that person liable to additional tax as providedfor in sub-article (1) of this article or in article 23(4) ofthis Act or in article 73(4) of the Income Tax Act.

(2C) Interest charged under subarticle (2A) shall not be deemedto be part of any tax or additional tax paid or payable for any of thepurposes of the Income Tax Acts.

(2D) The Commissioner may, at his discretion, remit wholly or





in part any interest chargeable under subarticle (2A) in accordancewith rules issued for this purpose by the Minister responsible forfinance.

(3) No opposition other than that specifically provided for inthis Act shall stay the issue or execution of any executive actobtained thereunder or the paying out of the proceeds of anywarrant or sale by auction carried out in pursuance thereof.

(4) The provisions of subarticle (3) shall not prejudice theamount of tax that may be finally determined under the otherprovisions of the Income Tax Acts.

Collection of tax after determination of objection or appeal.Amended by:IX. 1999.10.

45. Where payment of tax is kept in abeyance in accordancewith the provisions of article 41 pending the result of a notice ofobjection or of an appeal, the tax outstanding under the assessmentas determined on such objection or appeal, as the case may be, shallbe payable within the period ending on the last day of the calendarmonth immediately following that during which service of thenotification of tax payable has been made, and if such tax is notpaid within such period the provisions of the last preceding articleshall apply:

Provided that nothing in this article or in article 41 shall beconstrued as suspending the running of interest on the taxoutstanding as aforesaid and interest on the said tax shall becomputed and due in accordance with the provisions of article44(2A) as from the relevant tax settlement date up to the date ofpayment.

Payment of tax by persons about to leave Malta.Amended by:IX. 1999.11.

46. (1) If in any particular case, the Commissioner has reasonto believe that a person who has been assessed to tax may leaveMalta before such tax becomes payable under the provisions of theIncome Tax Acts without having paid such tax, he may by notice inwriting to such person demand payment of such tax within a time tobe limited in such notice. Such tax shall thereupon be payable at theexpiration of the time so limited and shall in default of payment,unless security for payment thereof be given to the satisfaction ofthe Commissioner, be recovered forthwith in the manner providedby article 44.

(2) If in any particular case, the Commissioner has reason tobelieve that tax upon any chargeable income may not eventually berecovered, he may at any time and as the case may require -

(a) forthwith by notice in writing require any person tomake a return and to furnish particulars of any suchincome within a time to be specified in such notice;

(b) make an assessment upon such person in the amount ofthe income returned or, if default is made in makingsuch return or the Commissioner is dissatisfied withsuch return, in such amount as the Commissioner maythink reasonable;

(c) by notice in writing to the person assessed require thatsecurity for the payment of the tax assessed beforthwith given to his satisfaction.


(3) Notice of any assessment made in accordance with theprovisions of subarticle (2) shall be given to the person assessed,and any tax so assessed (in accordance with the provisions ofsubarticle (2)) shall be payable on demand made in writing underthe hand of the Commissioner and shall in default of payment,unless security for the payment thereof be given to the satisfactionof the Commissioner, be recoverable forthwith in the mannerprovided by article 47.

(4) Any person who has paid the tax in accordance with ademand made by the Commissioner or who has given security forsuch payment under subarticle (2) shall have the rights of objectionand appeal conferred by articles 33, 35 and 37 and the amount paidby him shall be adjusted in accordance with the result of any suchobjection or appeal.

(5) The provisions of subarticle (2) shall not affect the powersconferred upon the Commissioner by articles 30 and 31.

Suit for tax by Commissioner.Amended by:IX. 1999.12;II. 2004.54;IV. 2007.30.

47. (1) Tax may be sued for and recovered, as the case mayrequire, in the Civil Court, First Hall, or in the Court of Magistrates(Malta) in its civil jurisdiction or in the Court of Magistrates(Gozo), also in its civil jurisdiction by the Commissioner in hisofficial name with full costs of suit from the person chargedtherewith, from the person by whom it is payable or from theperson responsible for its deduction as a debt.

(2) Save as otherwise expressly provided in the Income TaxActs and saving in particular the provisions article 30(5) and ofarticle 31(7), action for the payment of tax, additional tax, interestor any penalty may be taken during any time from the date onwhich it becomes due and payable up to eight years from that dateor, where an assessment in respect thereof has been made, from thedate on which that assessment becomes final and conclusive.

(3) The running of the period referred to in subarticle (2) shallbe interrupted by a demand note served through registered post bythe Commissioner or by any judicial act filed by the Commissionerbefore the expiration of such period demanding the payment of theamount claimed.

(4) Where the action referred to in subarticles (2) and (3) hasnot been taken within the time specified therein, and such timeexpires on or before the 31st December 2003, then, notwithstandingthe provisions of the said subarticles, action for the payment of thesaid tax, additional tax, interest or penalty may be taken until the31st December 2005.

Assistance in the collection of taxes.Added by:IV. 2011.62.Cap. 123.

47A. (1) The Commissioner shall lend assistance to foreign taxauthorities in the collection of revenue claims in accordance withthe provisions of applicable arrangements referred to in article 76of the Income Tax Act where these exist.

(2) For the purposes of subarticle (1), a notice by theCommissioner to any person showing the amount of a revenueclaim by a foreign tax authority to which he is liable for havingfailed to pay the said amount shall be sufficient evidence that the



amount shown in the said notice is the amount due to be paid to theforeign tax authority by the said person.

(3) For the purposes of this article, the arrangements in relationto the collection of taxes shall determine the meaning of "taxes"and "revenue claims".

PART VIII

RefundsRepayment of tax. Amended by: XX. 1996.21;V. 1998.7;IX. 1999.13;II. 2003.48;II. 2004.55;II. 2007.25;IV. 2007.31;IX. 2007.7;II. 2009.31;I. 2010.53;IV. 2011.63;XII. 2014.66;XIII. 2015.123.

48. (1) If it be proved to the satisfaction of the Commissionerthat any person for any year of assessment has paid tax, bydeduction or otherwise, in excess of the amount with which he isproperly chargeable, such person shall be entitled to have theamount so paid in excess refunded by the Commissioner. Everyclaim for repayment under this article should be made within fouryears from the date on which the assessment in respect of the yearof assessment to which it relates becomes final and conclusive:

Provided that in the case of a person making a claim forrepayment for any year of assessment in respect of which he has nochargeable income, such claim shall be made within four yearsfrom the end of the year of assessment to which the claim relates:

Provided also that where the claim relates to tax paid forthe year of assessment 1999 or any subsequent year of assessmentit shall be made within five years from the relevant tax return dateor, where an assessment in respect thereof has been made from thedate on which that assessment becomes final and conclusive:

Provided further that in no case shall any refund be made inrespect of -

(a) any tax which a company has deducted or is entitled todeduct from any dividend paid to any person who invirtue of any exemption granted by or under any law isnot chargeable to tax thereon; and

Cap. 123.(b) any tax charged on any body of persons under article

56(4) of the Income Tax Act, or under article 27(3) and(4); and

(c) any tax which a company has deducted or is entitled todeduct from any dividend paid to a collectiveinvestment scheme.

For the purposes of this proviso -"company" includes a collective investment scheme; and"dividend" includes any distribution made by a collective

investment scheme.(1A) Notwithstanding the provisions of subarticle (1), in no case

shall any refund be made to any person in respect of the year ofassessment 1999 or any subsequent year of assessment unless anduntil such person has filed all tax returns, which are required to befurnished under this Act, in respect of the years of assessment 1999up to and including the year of assessment preceding the year in



which the refund would have been payable but for the applicationof this subarticle.

Cap. 406.

(1B) Notwithstanding the provisions of subarticle (1), in no caseshall any refund be made under this Act to any person registeredfor the purpose of the Value Added Tax Act, unless and until suchperson has filed all tax returns or declarations required to befurnished for the purpose of the Value Added Tax Act in respect oftax periods up to and including the last complete tax period in theyear preceding that in which the refund would have been payablebut for the application of this subarticle.

(2) Except as regards sums repayable on an objection or appeal,no repayment shall be made to any person in respect of any year ofassessment as regards which that person has failed or neglected todeliver a return or has been assessed in a sum in excess of theamount contained in his return, provided he has received notice ofthe assessment made upon him for that year; unless that person hasmade an election under article 12 for that year or it is proved to thesatisfaction of the Commissioner that such failure or neglect todeliver a true and correct return did not proceed from any fraud orwilful act or omission on the part of that person.

Cap. 123.

(2A) Subject to the provisions of sub- subarticle (2B) any taxdetermined as repayable to a person for a year of assessment underarticle 31(1) or (2) shall become due or shall be deemed to havebecome due, as the case may be, in the case of a person to whomarticle 11(2) of the Income Tax Act applies, on the first of April,and, in the case of any other person, on the first of March, of theyear immediately following that year of assessment or on suchother date or dates, not being later than the dates aforesaid, as maybe prescribed.

(2B) (i) When the tax repayable has been determined underart icle 31 fol lowing a return furnished after therelevant tax return date it shall become due or shall bedeemed to have become due, as the case may be, on thelater of -

(a) the last day of the twelfth month following thatin which the said return was furnished, and

(b) the last day of the sixth month following the dateon which it would have otherwise become due interms of subarticle (2A).

(ii) In the case of a person to whom subarticles (1A) or(1B) apply, any refund which would have been payablebut for the provisions of the said subarticles, shallbecome due or shall be deemed to have become due, asthe case may be, on the last day of the twelfth monthfollowing that in which the tax returns referred to inthe said subarticles were furnished.

(2C) The Commissioner shall be entitled to deduct from anyrepayment due to a person as stated in subarticles (2A) and (2B)any tax, additional tax or interest that may be due by that personunder the Income Tax Acts.



(2D) Interest shall be payable by the Commissioner on anyrepayment of tax that becomes due under subarticle (2A) or (2B)after any deduction made in terms of subarticle (2C) as from thedate it becomes due as aforesaid at the rate of one per cent for everymonth or part thereof for which it remains unpaid:

Provided that for any period or part thereof commencing on orafter 1st January 2009, interest shall be calculated at the rate of pointseven five percent (0.75%) per month or part thereof and the totalinterest shall not exceed the amount of the said repayment:

Provided further that for any period or part thereofcommencing on or after 1st January 2014, interest shall be calculatedat the rate established by the provisions of article 44(2A) and the totalinterest shall not exceed the amount of the said repayment.

(2E) For the purposes of this article where the repayment of taxis made by means of a cheque or a draft, the tax shall be deemed tohave been repaid to a person on the day on which the cheque or thedraft is posted to that person’s last known address.

(2F) The provisions of subarticles (2B) to (2E) shall not apply torefunds to which subarticles (4) or (4A) or the provisos to subarticle(7)(a) refer.

(3) Any person who is aggrieved by the decision of theCommissioner as to the amount to be repaid under the provisions ofthis article shall have the same right to appeal against such decisionas if he were aggrieved by an assessment made upon him:

Provided that such appeal shall not reopen any questionwith respect to which a right of appeal under the provisions ofarticle 35 and 37 has lapsed or which has already been decided onappeal.

(4) (a) A person, in receipt of a dividend paid to him fromprofits allocated to the foreign income account or anyprofits distributed by an international trading company,as the case may be, may claim a refund of two-thirds ofthe Malta tax paid by the company in respect of thoseprofits distributed to him by way of such dividend,where such person is either:

(i) not resident in Malta and who is, whereapplicable, not owned and controlled by, directlyor indirectly, nor acts on behalf of, a person whois ordinarily resident and domiciled in Malta; or

(ii) a company resident in Malta which is whollyowned by a person or persons not resident inMalta, provided that such person or persons arenot owned and controlled by, directly orindirectly, or act on behalf of a person or personsordinarily resident and domiciled in Malta:

Provided that the conditions set out in paragraphs (i)and (ii) shall not apply in respect of dividends paid byany company registered in Malta to any recipientshareholder who is registered for the purpose of this


article 48(4) or article 48(4A).(b) Subject to the provisions of paragraph (a), where

profits distributed as aforesaid out of the foreignincome account derive from a participating holding orfrom the disposal of such holding, a claim may bemade for a refund of all of the Malta tax paid inrespect of those profits:Provided that with respect to a claim for refundrelative to dividends derived from a participatingholding acquired on or after 1 January 2007, the refundcontemplated by this paragraph shall only be due whenthe conditions set out in either paragraph (i) orparagraph (ii) below are satisfied:

(i) where the body of persons in which theparticipating holding is held satisfies any one ofthe following conditions, that is to say:(1) it is resident or incorporated in a country

or territory which forms part of theEuropean Union;

(2) it is subject to any foreign tax of at leastfifteen per cent (15%);

(3) it does not have more than fifty per cent(50%) of its income derived from passiveinterest or royalties;

(ii) where none of the conditions set out inparagraph (i) are satisfied then both of thefollowing two conditions must be satisfied:(1) the equity holding by the company

registered in Malta in the body of personsnot resident in Malta is not a portfolioinvestment and for this purpose theholding of shares by a company resident inMalta in a body of persons not resident inMalta which derives more than fifty percent of its income from portfolioinvestments shall be deemed to be aportfolio investment; and

(2) the body of persons not resident in Maltaor its passive interest or royalties havebeen subject to any foreign tax at a ratewhich is not less than five per cent (5%):

Provided further that the provisions of the immediatelypreceding proviso shall, with effect from 1 January2011, also be applicable to a claim for refund inrespect of the Malta tax paid on distributed profitscomprised in dividends received from a participatingholding acquired before the 1 January 2007.

(c) For the purposes of this subarticle, the expression"Malta tax paid" shall mean the tax actually paid bythe company to the Commissioner on the profitsdistributed out of the foreign income account or on any


profits derived and distributed by a company while itwas an international trading company, as the case maybe:

Cap. 123.

Provided that as regards claims made relative to thepayment of dividends from profits allocated to theforeign income account and brought to charge to tax inyear of assessment 2008 and subsequent years ofassessment the expression "Malta tax paid" shall, for thepurpose of determining the amount of the refund, meanthe tax actually paid by the company to theCommissioner on the profits so allocated plus theamount, if any, by which such tax has been reduced bya claim of relief of double taxation under the articlesreferred to in articles 74(a), (b) and (c) of the IncomeTax Act:Provided further that, notwithstanding the previousproviso, a tax refund payable in terms of this subarticleshall in no case exceed the amount of tax actually paid bythe company to the Commissioner on the profitsdistributed out of the foreign income account or on anyprofits derived and distributed by a company while it wasan international trading company, as the case may be:

Provided that the following provisos shall also apply to thewhole of subarticle (4):

(i) with effect from 1 January 2011 and up to 31December 2014, as regards dividends paid by acompany which was an international trading companyas at 31 December 2010, the provisions of this articleshall continue to apply after 31 December 2010 withrespect to the distribution of profits earned by suchcompany while it was an international tradingcompany;

(ii) a person resident in Malta, registered for the purposeof making a claim in terms of this subarticle in suchmanner as may be prescribed, may also claim a taxrefund contemplated by this subarticle with respect todividends paid from profits allocated to the foreignincome account when such dividend is paid:1. by a company which was a company registered

in Malta on or after 1 January 2007 but was notresident in Malta before that date; and

2. by any company which has exercised its optionin terms of paragraph (i) of the proviso to article48(4A)(b); and

3. by any other company registered in Malta out ofprofits derived by the said company in respect ofaccounting periods which commenced on orafter 1 January 2011.

(4A) (a) With effect from 1 January 2007 a person, in receipt ofa dividend paid to him by a company registered in




Malta from profits allocated to its Maltese taxedaccount or its foreign income account, may claim arefund of six-sevenths of the Advance CompanyIncome Tax pertaining to those profits distributed tohim by way of such dividend, provided that suchperson is for such purpose registered in such manneras may be prescribed:Provided that where the dividend is paid out of profits:

Cap. 123.

(i) consisting of passive interest or royalties or ofdividends received from a participating holdingin a body of persons which does not satisfy theconditions referred to in the proviso to article12(1)(u) of the Income Tax Act, the rate ofrefund shall be of five-sevenths of the saidAdvance Company Income Tax;

(ii) allocated to the foreign income account and inrespect of which profits the company hasclaimed relief of double taxation no claim forrefund may be made under this subarticle:

Provided further that, notwithstanding the provisionsof article 42B(2), a tax refund payable in terms of thissubarticle shall in no case exceed the amount of taxactually paid by the company to the Commissioner onthe profits distributed out of the Maltese taxed accountor foreign income account.

(b) During the period from 1 January 2007 to 31December 2010, any refund contemplated in thissubarticle may only be claimed by a person in receiptof a dividend from a company which was a companyregistered in Malta on or after 1 January 2007 but wasnot resident in Malta before that date:Provided that:

(i) a person in receipt of a dividend from a companyreferred to in any of sub-paragraphs (1) or (2)and paid after the said company has informedthe Commissioner as contemplated in the saidparagraphs (1) or (2) below, may also claim a taxrefund in terms of this subarticle during theaforementioned period if the conditions ofparagraph (a) are satisfied:1. a company which qualifies as an

international trading company and whichinforms the Commissioner that it has optedto cease to be an international tradingcompany which option shall be approvedby an extraordinary resolution of themembers of such company;



Cap. 123.

2. a company which has informed theCommissioner that it has opted to betreated as a company which was registeredin Malta on or after 1 January 2007 butwas not resident in Malta before that date,where such company had, in the threeaccounting periods immediately precedingthat in which it has so informed theCommissioner, in the aggregate more than50% of its profits allocated to the foreignincome account or consisting of income inrespect of which the exemption providedby article 12(1)(u) of the Income Tax Actis applicable and has been applied, whichoption shall be approved by anextraordinary resolution of the members ofsuch company:Provided that:(aa) where the company was not in

existence or was not resident orregistered in Malta during the wholeof the above mentioned three yearperiod the condition relating to thenature of its income set out inparagraph (2) above shall bedetermined by reference to theperiod that such company was inexistence, resident or registered inMalta as the case may be;

(bb) The Commissioner may, in hisdiscretion, determine that paragraph2 above applies to a company if he isof the opinion that it is likely that inthe foreseeable future more than halfof the distributable profits of thecompany will consist of any or all ofthe following categories of income:- profits that will be allocated to

the foreign income account;- profits which are not subject to

tax but which would otherwisebe allocated to the foreignincome account;

- dividends received from aninternational trading company,including, where applicable,dividends paid after thatcompany has exercised theoption under paragraph 1 ofproviso (i);



S.L. 234.43

- income derived from theownership and, or chartering ofany tonnage tax ship as definedin the Merchant Shipping (Tax-ation and Other MattersRelating to Shipping Organisat-ions) Regulations;

S.L. 234.43

S.L. 234.42

- income derived from theownership and, or chartering ofany ship, yacht, boat and anyother vessel (in each case notbeing a tonnage tax ship asdefined in the MerchantShipping (Taxation and OtherMatters Relating to ShippingOrganisations) Regulations),provided that the aforesaidincome is derived by a companywhich was originallyincorporated in terms of andsubject to the MerchantShipping (Shipping Organis-ations - Private Companies)Regulations, and whose objectswere restricted as requiredunder such Regulations;

S.L. 325.06

- income of any companyqualifying for benefits in termsof regulation 4, 5 or 6 of theBusiness Promotion Regu-lations:

Provided further that a company to whichparagraph (2) above applies shall not be entitledto claim a refund in respect of the Malta tax paidon profits allocated to its Maltese taxed accountin years of assessment prior to year ofassessment 2008.

(ii) such company did not derive any of its profits,(even if such profits are not comprised in thesaid dividend) directly or indirectly, from atrade, business or other activity (hereinafterreferred to as "the new activity") which is inwhole or in part the same or an expansion,replacement or duplication of a trade, businessor other activity which was carried on in Malta,prior to the 1 January 2007, by any person(hereinafter referred to as the "old activity"); andthe foregoing shall be interpreted in the light ofthe following:

(1) where the human, tangible or intangibleresources of the new activity aresubstantially the same as those which were













utilised by old activity, it shall bepresumed, unless the contrary is proved,that the new activity is the same or anexpansion, replacement or duplication ofan old activity;

(2) where the new activity is carried ondirectly or indirectly by any person in anyway directly or indirectly connected orassociated with the persons which carriedon the old activity through shareholding,voting or other ownership or controllingrights it shall be presumed, unless thecontrary is proved, that the new activity isthe same or an expansion, replacement orduplication of an old activity;

(3) a new activity shall not be presumed to bethe same or an expansion, replacement orduplication of an old activity merelybecause the new activity is similar to anold activity because, inter-alia, it providesthe same type of goods or services orbecause the new activity operates in thesame market as the old activity andcompetes with the old activity:

Provided that where the old activity had beencarried by a company to which proviso (i) to thisparagraph (b) may be applied the new activityshall not be considered in whole or in part thesame or an expansion, replacement orduplication of the old activity.

Cap. 123.

(c) For the purpose of paragraph (b)(ii) where theCommissioner is of the opinion that any activitycarried out by any company which consists of any partof any administrative, management or other activitycarried on by any person as part of his businessactivities prior to the 1 January 2007, and any otheractivity forms part of a scheme the sole or mainpurpose of which is the avoidance of the provisions ofparagraph (b) shall be a trade, business or activitywhich was carried on in Malta, prior to the 1 January2007, by any person; and for this purpose the word"scheme" shall have the meaning assigned to it byarticle 51(5) of the Income Tax Act.

(d) Without prejudice to proviso (i) of paragraph (b) aclaim for refund pursuant to paragraph (a) in respect ofdividends paid from profits allocated to the Maltesetaxed account by companies which were resident inMalta prior to the 1 January 2007 may only be made inrespect of the tax paid on profits derived by the saidcompany in respect of accounting periods whichcommenced on or after 1 January 2011:

Provided that a claim for refund may be made pursuant to



paragraph (a) in respect of dividends distributed from profits allocatedto the Maltese taxed account of companies which were resident in Maltaprior to the 1st January, 2007, which profits were derived by thosecompanies in accounting periods which commenced prior to the 1stJanuary, 2011, where those dividends fall within the purport of proviso(i) to sub-article (4) of this article but do not result in an entitlement forrefund in terms of the said proviso merely due to the expiration of thedeadline of the 31st December, 2014.

(5) A claim for refund pursuant to subarticle (4) or subarticle(4A) shall be made not later than four years from the date fromwhich the amount of tax is eligible for refund.

Cap. 123.

(6) The Commissioner shall make payment of the refund undersubarticle (4) or subarticle (4A) on being satisfied as to thecorrectness of the claim made and upon receipt of a certificateissued by the company paying the dividend under the provisions ofarticle 59(5) of the Income Tax Act. Such refund, unless otherwiseprovided for in the Income Tax Acts, shall not be taxable:

Provided that notwithstanding anything contained in theIncome Tax Acts the Commissioner shall not make such paymentunless any tax due under the investment income provisions inrespect of investment income referred to in article 41(a)(viii)(2) or(4) comprising the distributed profits the tax paid on which is thetax in respect of which the claim pursuant to this subarticle ismade, has been paid.

(7) (a) Where a claim for refund has been made under theprovisions of subarticle (4) or subarticle (4A) inrespect of Malta tax paid on distributed profits asproperly shown in the relevant dividend certificate, noperson shall be entitled to a further refund under thosesubarticles or to a refund under any other provisions ofthe Income Tax Acts in relation to the Malta tax paidon such distributed profits:Provided that a person entitled to such refund as setout under subarticle (4) in respect of profits distributedby an international trading company shall also beentitled to a refund of the difference between the Maltatax paid by the international trading company and thetax chargeable on such person on such income inaccordance with the provisions of this Act:Provided further that the provisions of the immediatelypreceding proviso shall during the period 1 January2011 to 31 December 2014 also apply in the case ofany profits distributed by a company which was aninternational trading company as at 31 December 2010where such profits were earned by such companywhile it was an international trading company.



Cap. 123.

(b) Where a claim for refund has been made under theprovisions of subarticle (4) or subarticle (4A) inrespect of Malta tax paid on distributed profits asproperly shown in the relevant dividend certificate,notwithstanding the provisions of article 60 of theIncome Tax Act, such Malta tax paid which a companyhad deducted or is entitled to deduct under article 59from such dividend, shall, when such dividend isincluded in the chargeable income of any person,including a company receiving the said dividend or aperson holding directly or indirectly shares in suchcompany which receives a dividend out of suchprofits, be set off, for the purposes of collection, onlyagainst the tax charged on that dividend.

(c) Where a claim for refund of the Malta tax paid has beenmade under subarticle (1) in respect of Malta tax paid ondistributed profits as properly shown in the relevantdividend certificate, no person shall be entitled to afurther refund under the provisions of subarticle (4) orsubarticle (4A) in relation to the Malta tax paid on suchdistributed profits.

(8) A refund due by the Commissioner as aforesaid shallconstitute a debt due by the Commissioner to the claimant whichshall be payable not later than the fourteenth day following the dayon which the refund becomes due and shall be recoverable as such.

(9) Where a refund of tax by the Commissioner is wholly orpartly not due to a person, it shall be the duty of such person tomake a repayment thereof to the Commissioner within thirty daysfrom the date of receipt of such refund, and where such repaymentis not paid as aforesaid interest shall be charged according to theprovisions of article 44.

(10) If any person claims a refund in terms of subarticle (4) orsubarticle (4A) when that person was not entitled to the said refundsuch person shall be liable to pay a penalty equal to the amount ofthe refund claimed and if the refund was in fact paid to him thatperson shall in addition be liable to repay the tax so refunded and toaddi t ional tax of seven per cent per month or par t thereofcommencing from the month in which the said refund was paid tohim up to the month in which he repaid the tax refunded and anypayment made by the said person in respect of the tax repayable byhim in terms of this paragraph shall first be applied against anyadditional tax due thereon:

Provided that the provisions of this subarticle shall not beapplicable when the person referred to therein proves that he didnot know and could not reasonably have known that he was notentitled to such a tax refund.

(11) The Minister responsible for finance may from time to timemake rules in relation to the carrying out of the provisions of thisarticle.



PART IX

Offences and PenaltiesGeneral provisions regarding offences.Amended by:L.N. 425 of 2007;XII. 2014.67.

49. (1) Any person who contravenes or fails to comply withany of the provisions of the Income Tax Acts or of any rules madethereunder shall be guilty of an offence and, unless anotherpunishment is specifically provided by the Income Tax Acts, heshall be liable on conviction to a fine (multa) of not less thantwenty-three euro (23) and not exceeding one hundred and sixteeneuro (116).

Cap. 446.

(2) Where a person is, on or after 1st July 1977, found guilty ofan offence under any of the provisions of the Income Tax Acts andis not sentenced to imprisonment for that offence the court shallexpressly warn him that if, within five years from the date of thewarning, he is again found guilty of another offence under any ofthe provisions of the Income Tax Acts (whether of the same natureor not) he shall be sentenced, in addition to any other punishment,to not less than three days imprisonment or to a fine (multa) of onethousand and five hundred euro (€1500); and a person so foundguilty on a second or subsequent occasion, within the periodaforesaid, shall , notwithstanding anything contained in theProbat ion Act , or in any other enactment , be sentenced toimprisonment for a term of not less than three days or a fine (multa)of five thousand euro (€5000), in addition to any other punishmentexcept imprisonment for a longer term.

Penalty for failure to comply with notice.Amended by:L.N. 425 of 2007;I. 2008.7.

50. Every person who without sufficient cause -(a) fails to comply with the requirements of a notice,

intimation, request or demand note given or made tohim or served upon him under the Income Tax Acts; or

(b) fails to attend in answer to a notice issued to him underthe Income Tax Acts or having attended fails to answerany question lawfully put to him,

shall be guilty of an offence and shall be liable on conviction to afine (multa) of not less than twenty-three euro (23) and notexceeding ten thousand euro, and to a further fine (multa) notexceeding two hundred euro for every day during which the defaultcontinues after conviction.

Penalty for making incorrect returns, etc.Amended by:L.N. 425 of 2007.

51. (1) Every person who without reasonable excuse -(a) makes an incorrect return by omitting or understating

any income of which he is required by the Income TaxActs to make a return; or

(b) gives any incorrect information in relation to anymatter or thing affecting his own liability to tax or theliability of any other person or of a partnership,

shall be guilty of an offence and shall, on conviction, be liable to afine (multa) of not less than fifty-eight euro (58) and not exceedingfour hundred and sixty-five euro (465) and, in addition, to doublethe amount of tax which has been undercharged in consequence ofsuch incorrect return, or information, or would have been so



undercharged if the return or information had been accepted ascorrect.

(2) No person shall be liable to any penalty under this articleunless the complaint concerning such offence was made in the yearof assessment in respect of or during which the offence wascommitted or within three years after the expiration thereof.

(3) The Commissioner may compound any offence under thisa r t i c l e , and may be fo re j udgmen t s t ay o r compound anyproceedings thereunder.

Penal provisions relating to fraud, etc.Amended by:L.N. 425 of 2007;IV. 2011.64.

52. (1) Any person who wilfully with intent to evade or toassist any other person to evade tax under the Income Tax Acts -

(a) omits from a return or any other document orstatement made, prepared or submitted for thepurposes of or under the Income Tax Acts, any incomewhich should be included therein; or

(b) makes any false statement or entry in any return orother document or statement prepared or submitted forthe purposes of or under the Income Tax Acts; or

(c) gives any false answer, whether verbally or in writing,to any question or request for information asked ormade in accordance with the provisions of the IncomeTax Acts; or

(d) prepares or maintains or authorises the preparation ormaintenance of any false books of account or otherrecords or falsifies or authorises the falsification ofany books of account or records; or

(e) makes use of any fraud, art or contrivance whatever orauthorises the use of any such fraud, art orcontrivance; or

(f) has in his possession or under his control any articlefor use in the course of or in connection with altering,destroying, erasing or concealing any information,records or evidence which he knows or is reasonablyexpected to know to be relevant for any purpose of thisAct; or

(g) makes, adapts, supplies or offers to supply any articleknowing that it is designed or adapted for use in thecourse of or in connection with altering, destroying,erasing or concealing any information, records orevidence which he knows or is reasonably expected toknow to be relevant for any purpose of this Act, orintending it to be used to commit, or assist in thecommission of fraud; or

(h) alters, destroys, conceals, covers up, falsifies, or makes afalse entry in any record, document, electronic data ortangible object,

shall be guilty of an offence, and shall be liable on convictionbefore a Court of Magistrates si t t ing as a court of criminal


judicature -(i) to a fine (multa) not less than seven hundred

euro (€700) and not exceeding three thousandfive hundred euro (€3,500) in the case of anyoffence committed under paragraphs (a) to (d);and

(ii) to a fine (multa) of not less than six thousandeuro (€6,000) and not exceeding ten thousandeuro (€10,000) for an offence committed underparagraphs (e) to (h),

and, in addition, for each offence as above referred to in paragraphs(a) to (h), to treble the amount of tax to which the person whose taxliability it was intended to evade, or to assist in evading, is liableunder the Income Tax Acts for the year of assessment in respect ofor during which the offence was committed, or to imprisonment forany term not exceeding six months, or to both such fine andimprisonment.

For the purposes of paragraphs (f) and (g) the term "article"includes any program or data held in electronic form.

(2) The Commissioner may compound any offence under thisa r t i c l e , and may be fo re j udgmen t s t ay o r compound anyproceedings thereunder.

Penalty for offences against official secrecy.Amended by:L.N. 425 of 2007.

53. Any person who, having or having had any official duty orbeing or having been employed in the administration of the IncomeTax Acts, has or had access to, possession of or control over anydocuments, information, returns or assessments, relating to theIncome Tax Acts, or copies thereof, and who, except as provided inarticle 4, at any time communicates or attempts to communicateany such information or anything contained in such documents,returns, assessments or copies to any person, shall be guilty of anoffence and shall on conviction be liable to a fine (multa) of notless than two hundred and thirty-two euro (232) and not more thantwo thousand and three hundred and twenty-five euro (2,325), or toimprisonment for a period not exceeding six months, or to bothsuch fine (multa) and imprisonment.

Tax to be payable notwithstanding any proceedings for penalties, etc.

54. The institution of proceedings for, or the imposition of, apenalty, fine or term of imprisonment under the Income Tax Actsshall not relieve any person from liability to payment of any tax forwhich he is or may be liable.

Saving for criminal proceedings.

55. The provisions of the Income Tax Acts shall not affect anycriminal proceedings under any other Act or law.

Prosecution to be with the sanction of Commissioner.

56. No prosecution for any offence against the Income TaxActs may be commenced except at the instance of or with thesanction of the Commissioner.


Documents containing evidence of act or omission by warrant holder.Added by: V. 1998.4.Amended by:V. 2012.46.Cap. 281.

57.* (1) In this article -(a) "warrant holder" means a person or firm in possession

of a warrant issued under the Accountancy ProfessionAct;

(b) "Board" means the Board constituted under article 6 ofthe Accountancy Profession Act.

(2) Where the Commissioner is of the opinion that anydocument which has been produced to or obtained by him for anypurpose of the Income Tax Acts for the year immediately precedingthe year of assessment beginning on 1st January, 1998 andsubsequent years, being a document to which this article refers,constitutes or contains evidence of any act or omission on the partof a warrant holder, and that such act or omission is an act oromission mentioned in article 15(1)(a)(i) of the AccountancyProfession Act he shall, subject to the other provisions of thisarticle, send a copy of that document to the Board.

(3) The Commissioner shall certify any document he sends tothe Board in accordance with subarticle (1) hereof as a true copy ofthe original and shall send to the Board together with any suchdocument a statement giving the reasons for which he has formedhis opinion, provided that no reference may be made in any suchstatement to any facts or circumstances which do not result fromthe said documents.

(4) The Board may use any document received in accordancewith the provisions of this article for the purpose of an enquirywhich it may conduct under the said Act but not for any otherpurpose.

(5) A document sent to the Board and certified as a true copy ofthe original in accordance with this article shall be admissible asevidence as if it were the original and the production of suchdocument shall not empower any court or authority to request theCommissioner to produce the original of such document or to giveevidence on such document except as may be allowed under theother provisions of the Income Tax Acts:

Provided that the Commissioner may be required toproduce the original of any such document in any case where it isnecessary to prove the handwriting or the signature or the identityof the warrant holder in question, but only for the purpose of suchproof and provided that the said original shall be returned to theCommissioner as soon as it is no longer required for the purpose forwhich it has been produced.

(6) Within a reasonable time from the receipt of any documentsent to it in accordance with this article, the Board shall inform theCommissioner in writing whether it proposes to use the saiddocument for the purpose referred to in subarticle (4) hereof or not,and, in the latter case, the Board shall state the reason for itsdecision not to make such a use and shall return the document tothe Commissioner.

*This article was originally added as article 19A.





(7) Within a reasonable time from the conclusion of anyenqui ry in which any documents re fer red to the Board inaccordance with this article have been used, the Board shall deliverto the Commissioner a copy of its decision on that enquiry.

(8) Nothing in this article shall be construed as - (a) empowering the Board to request any information or

documents from the Commissioner or to otherwisehave access to documents or other information held bythe Commissioner;

(b) binding the Commissioner to give evidence or expla-nations in respect of any documents sent by him to theBoard;

(c) binding the Commissioner to conduct any investi-gation or make reports on the conduct of any warrantholder.

(9) The documents to which this article refers are:(a) any report or certification signed by a warrant holder;(b) any records, books, accounts or computations, or any

extract thereof, in respect of which a report orcertification referred to in paragraph (a) hereof hasbeen made: Provided that a document referred to in thisparagraph shall not be deemed to be a document towhich this article refers unless it is sent to the Boardtogether with the said report or certification.

PART X

Power to make rulesPower to make rules.Amended by:II. 2002.81;IV. 2011.65;III. 2013.54.

58. The Minister responsible for finance may from time to timemake rules generally for carrying out the provisions of this Act andmay, in particular, by those rules provide -

(a) for the form of returns, claims, statements and noticesunder this Act;

(b) for the use of electronic communications with respectto the form and delivery of returns, claims, statements,notices and information or documents the form anddelivery of which is authorised or required by or underthe Income Tax Acts and of regulations madethereunder, including the making of payments byelectronic means under the said Acts and regulations;

Cap. 123.

(c) for the fees to be levied in relation to the issue of taxresidency and tax balance certificates, application for aruling in terms of articles 52 and 27A of the IncomeTax Act, registration of shareholders and applicationfor a refund under article 48(4) and (4A); and

(d) for any such matters as are authorised by this Act to beprescribed.




Record of certain exemptions to be laid on Table of the House of Representatives.Cap. 123.

59. A record of any exemption made by the Ministerresponsible for finance under the provisions of article 12(2) of theIncome Tax Act, in regard to any body of persons, or class ofpersons, shall be laid on the Table of the House of Representativesas soon as may be after it is made.

Transitory provision.Cap. 123.

60. (1) The provisions of article 4(4A) of the Income Tax Actas in force immediately before the coming into force of this Act andthe Income Tax (Amendment) (No.2) Act, 1994, shall continue inforce with respect to every capital assets return mentioned in thatsubarticle with respect to the years of assessment mentioned in thatsubarticle up to the year of assessment 1994.

Cap. 123.(2) The provisions of the Income Tax Act with respect toreturns of income and capital assets for the years of assessment upto the year of assessment 1994, shal l continue in force, asimmediately in force before the coming into force of this Act.



URL http://www.justiceservices.gov.mt/DownloadDocument.aspx?app=lom&itemid=8658&l=1